Rhode Island Sues Curt Schilling’s 38 Studios for “Fraud,” “Racketeering,” “Conspiracy”
Rhode Island sues Curt Schilling, 38 Studios to recoup losses
By Michael B. Farrell (Excerpt)
Boston Globe, November 01, 2012
Rhode Island on Thursday sued Curt Schilling over his bankrupt company, 38 Studios LLC, seeking to recover some of the $75 million in loans it guaranteed to lure the firm from Massachusetts and alleging that the former Boston Red Sox pitcher and associates manipulated the state to secure the financing.
In a detailed, 97-page complaint filed in Rhode Island Superior Court, the state alleges a broad conspiracy in which Schilling and 13 other defendants engaged in financial misconduct, neglect, and fraud to deceive officials about the company’s financial prospects.
The suit, which seeks unspecified damages, claims that several former 38 Studios executives, investment banks Wells Fargo Securities and Barclays Capital, and Keith Stokes, former head of the Rhode Island Economic Development Corporation, misled the development agency’s board and broke the law to secure funding for 38 Studios.
The suit also claims that “38 Studios knowingly received income from a racketeering activity” and invested that money in the company.
Schilling could not be reached for comment. His lawyer, Stokes, and the other defendants did not return calls for comment.
Stokes, one of the chief architects of the 38 Studios deal, was appointed by Rhode Island’s then-governor, Donald Carcieri, in 2010 and ran the Economic Development Corporation until he resigned in May amid controversy around the company’s collapse. The agency’s former deputy director, J. Michael Saul, its lawyers, and advisers are also named in the complaint. …