RI sues Schilling over 38 Studios loan guarantee
Rhode Island's economic development agency has sued former Red Sox pitcher Curt Schilling and some of its former officials. It is alleged they committed fraud and other acts that misled the state into approving a $75 million loan guarantee to his failed video game company.
The suit was filed in Rhode Island Superior Court four months after 38 Studios filed for bankruptcy following a spectacular collapse that has likely left the state on the hook for as much as $100 million.
Among other things, the lawsuit claims that executives at 38 Studios, as well as former Economic Development Corp. Executive Director Keith Stokes and others, knew the company would run out of money by 2012, but concealed that from the EDC board, which made the final decision on whether to back the deal.
The suit also alleges that Schilling, 38 Studios executives and others engaged in racketeering and conspiracy. The suit does not ask for a specific dollar amount but wants Schilling and others to repay the bonds and seeks triple damages.
38 Studios collapsed into bankruptcy in June. Rhode Island is likely responsible for about $100 million when interest is factored in on the bonds the state issued on the company's behalf.
(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)