RIEDC initiates legal proceedings against 38 Studios

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PROVIDENCE — In a press release issued mid-day Thursday, Nov. 1, Gov. Lincoln Chafee announced the state, through the embattled Rhode Island Economic Development Commission, has initiated legal proceedings against 38 Studios in an effort to recoup the upwards of $75 million lost to taxpayers.

The release reads as follows:

As you know, in the past I have raised many concerns regarding the 38 Studios deal. When it became clear that the company would not survive, I publicly stated my commitment to you that my primary goal would be to do everything within my power to protect the taxpayers of Rhode Island. I will work to minimize any loss of your hard earned taxpayer dollars.

With that goal guiding us, we engaged Max Wistow, a seasoned attorney with decades of experience in complex litigation matters, including financial restitution and settlements.

Over the past four months, Mr. Wistow and his team have thoroughly examined the 38 Studios situation and the state's position.

In executive session of the Economic Development Corporation Board, we received an extensive briefing from Mr. Wistow on his findings. In that meeting, the Board voted without opposition to authorize legal action.

This vote was not taken lightly, and it was taken with the clear goal of protecting the taxpayers of Rhode Island.

The 38 Studios saga has understandably generated a great deal of attention from the media and the public at large. I know, therefore, that there will be pressure to discuss the complaint. However, neither I, nor the other members of the EDC Board, nor the attorneys representing the EDC in this matter will be able to do so. Further discussion of the complaint could jeopardize this process and endanger our ability to recoup taxpayer losses. The complaint on its own contains a great deal of important and illuminating information on how this deal unfolded.

Litigation is often long and tedious. The filing of this complaint is only the beginning. I know therefore there still will be many unanswered questions as the legal process continues and if and when other information comes to light it will be appropriately addressed.

My message to Rhode Islanders is this: I know that you work hard for your paychecks, and for your tax dollars to be squandered is unacceptable. The Board’s legal action was taken to rectify a grave injustice put upon the people of Rhode Island. You have my commitment that I will continue fighting to protect the interest of all Rhode Islanders every day that I am Governor.

To view the complaint in its entirety please visit www.riedc.com

38 Studios, RIEDC

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