PROVIDENCE, R.I. (AP) — Rhode Island officials have hired a law firm to investigate whether any third parties might be held financially liable after the collapse of former Red Sox pitcher Curt Schilling's video gaming company, the state's governor said Tuesday.
Gov. Lincoln Chafee said the Economic Development Corp. has retained the firm of Wistow & Barylick to determine whether the state could recover any money from individuals or groups involved in the state's $75 million loan guarantee to 38 Studios.
Officials declined to say from whom the state might seek claims. But attorney Max Wistow, a partner at the Providence firm, said past members of the EDC board, which approved the loan guarantee in 2010, are among those he wants to interview.
"We're going to try to find out what happened," said Wistow, who will serve as special counsel to the EDC. "We'll be looking at everything."
Wistow said he would "marshal the facts" by reviewing documents related to the loan guarantee and working alongside auditors hired by the state to review 38 Studios' finances. He said it was possible no money would be recovered but that he hoped he'd come up with "something worthwhile."
The firm, whose hiring was approved on Monday by the EDC board, will be paid 16.67 percent of any such funds, which Chafee called a "good deal" for the state.
State and federal authorities are conducting a separate investigation into Schilling's firm. They have declined to comment on the details.
38 Studios was lured from Massachusetts to Rhode Island after the EDC offered it a loan guarantee that the state said at the time would bring hundreds of jobs and millions of dollars in tax revenues. State officials, including Chafee and House Speaker Gordon Fox, have said they learned of the company's financial troubles in April, shortly before 38 Studios missed a $1.125 million payment to the EDC.
The company laid off all its employees several weeks later, and filed for bankruptcy protection on June 7. The state is now trying to determine how much it's on the hook for, with Chafee promising to "claw back" whatever taxpayer money he can.
38 Studios owes $150.7 million and had assets of $21.7 million, according to bankruptcy filings. An affiliate, 38 Studios Baltimore, owes more than $121.4 million and has assets of more than $335,000. Rhode Island is by far the company's largest creditor.
Wistow's analysis is separate from the state's efforts to salvage some of its investment in 38 Studios in bankruptcy court.
Speaking at a Statehouse news conference, Chafee also took issue with a recent claim by Schilling on WEEI in Boston that the governor was not willing to work with an investor Schilling said was ready to put $15 million or $20 million into the company to help save it. Chafee disputed there was an investor ready to step in.
"We would have been very aggressive in helping any way possible," he said.
Schilling said he put more than $50 million of his baseball fortune in the company and was "tapped out."
Schilling, who also pitched for Baltimore, Houston, Philadelphia and Arizona, won the World Series three times and is perhaps best remembered for pitching Game 6 of the 2004 American League Championship Series with an injured ankle that stained his sock with blood.