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Court Documents On 38 Studios to Be Released; Timing Unclear

All the currently sealed court documents in the state's lawsuit over 38 Studios will be made public, Judge Michael Silverstein said Friday, although the...

All the currently sealed court documents in the state's lawsuit over 38 Studios will be made public, Judge Michael Silverstein said Friday, although the timing of the release remains unclear for now.

During a status hearing, Silverstein said lawyers in the case agreed to the unsealing of documents since discovery has been completed.

Silverstein said he expected the release of the records to take place within about 10 days, but it remains unclear exactly when the voluminous amount of information in the case will be made public.

The sealed documents could contain dramatic revelations shedding light on Rhode Island's losing investment with 38 Studios. The company's failure more than three years ago left taxpayers on the hook for more than $100 million, a portion of which has already been paid.

Court officials plan to meet Monday morning to discuss the logistics of releasing the documents, according to Providence Superior Court Clerk Henry S. Kinch Jr., who is overseeing the discussion,

Part of the challenge is that years of 38 Studios court documents filed up until November 2014 exist only on paper as court documents. Kinch said lawyers in the case may have electronic versions, and that could make it easier to release the information.

Yet Kinch said the release of a huge amount of information isn't unprecedented for the state court system; he pointed to a 2006 lawsuit over lead paint as an example of how the courts can effectively manage the process.

"It's got to be correct and it's got to be organized," Kinch said. He said the 38 Studios records are stored at the courthouse "in a secure vault that only a few of us have the combination to."

The lawsuit against a series of defendants over the failure of 38 Studios was initiated by former governor Lincoln Chafee in 2012. The defendants include former Red Sox star Curt Schilling, who owned the company; Wells Fargo Securities; First Southwest Company; and two top former officials with the state's economic development agency, among others.

Under Governor Gina Raimondo, the state's economic development agency, now known as the Commerce Corporation, called for the unsealing of the 38 Studios court documents.

Max Wistow, the state's lead lawyer in the lawsuit aimed at cutting taxpayers' losses, said, "There are boxes and boxes and boxes of stuff" and "thousands and thousands and thousands of pages."

Wistow said the state's lawsuit was motivated by an attempt to document what went wrong with 38 Studios, which was attracted to Rhode Island with a $75 million state loan guarantee in 2010.

"There was a hue and cry, a legitimate hue and cry -- what was going on here?" Wistow said.

Schilling has faulted Chafee for the failure of 38 Studios.

The legislature approved the loan program used in connection with 38 Studios, and the state's economic development agency signed off on the deal with the company. The company went bankrupt in 2012.

State Sen. Jim Sheehan (D-North Kingstown) attended the hearing Friday and said he was among those who had asked Judge Silverstein to release the 38 Studios documents.

"I'm hoping that we can get some of these facts out to the public forum and that the truth be known, exactly what transpired in the debacle that was 38 Studios," Sheehan told reporters during a break in the court hearing. "I think this is going to be one of the best ways that we can achieve that, is to shine light on all the testimony, depositions, and exhibits that have been filed on both sides of this case."

"I really don't what to expect to see," Sheehan added. "That's why I'm here. I'm hoping that we can find out exactly the whole truth and nothing but the truth. That would be a great benefit to the public."

House Speaker Nicholas Mattiello said he was "pleased with Judge Silverstein's ruling to release all of the 38 Studios' documents," in part since it could help the state to avoid making similar mistakes.

"The public will now be aware of the facts, the mistakes and the wrong-doing that led to the 38 Studios' debacle," Mattiello said in a statement. "I have had to be patient throughout this process because I have said all along that the best approach is for the Superior Court to unseal the documents and for the State Police to continue its investigation. I have tremendous faith in our State Police as the appropriate agency to pursue criminal activity."

Sheehan argued, as have others, that unanswered questions about 38 Studios have fueled public mistrust toward the Pawtucket Red Sox's proposed move to Providence. He also said releasing the court documents is a better approach than a legislative probe for shining a light on 38 Studios.

Depositions in the case will be released if they were filed in court with other documents, court spokesman Craig Berke said.

Silverstein is also considering whether to approve a $12.5 million settlement with four of the defendants in the 38 Studios case, including two former top officials with the state's economic development agency.

This story has been updated.

The legal battle over 38 Studios continues to play out in Superior Court in Providence.
The legal battle over 38 Studios continues to play out in Superior Court in Providence.