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Schilling calls suit political, denies wrongdoing

PROVIDENCE, R.I. — Former Boston Red Sox pitcher Curt Schilling has called a lawsuit brought against him by Rhode Island’s economic development agency “political” and denied wrongdoing in connection with a $75 million loan guarantee the state gave his failed video game company, 38 Studios.

The Rhode Island Economic Development Corp. on Thursday sued Schilling, some of its former employees and others, saying they committed fraud and other acts that misled the state into approving the deal. 38 Studios laid off all its employees and declared bankruptcy earlier this year.

In his first public comments on the lawsuit, Schilling, in a written statement sent Friday to The Associated Press, said the EDC’s decision was made “with its eyes wide open and with full understanding of any risks.”

Schilling said he had not yet seen the lawsuit, but believes he’s being sued in part because of critical comments he made about Gov. Lincoln Chafee’s handling of the situation.

The deal with 38 Studios was struck in 2010, under the leadership of former Republican Gov. Don Carcieri. Chafee, an independent, was harshly critical of the deal as a candidate, but said he wanted to see the company succeed once he became governor.

In 2009, 38 Studios bought Timonium-based Big Huge Games, which employed 110 people when it closed in May.

Schilling has accused Chafee of not doing enough to help 38 Studios stay afloat and publicly called him a “buffoon” and a “dunce of epic proportions.” Chafee opposed giving the company more financial support after it began having money troubles, saying it did not have a viable plan for survival.

“I am confident that when the claims against me are adjudicated, it will be determined that the claims were brought against me for political reasons, not based on any alleged wrongdoing on my part,” Schilling said in the statement.

Chafee, who serves as the EDC board chairman, would not comment on Schilling’s statement, and when asked about the lawsuit Friday would say only, “My job is to protect the taxpayers of Rhode Island.”

The lawsuit claims that Schilling and various 38 Studios executives, as well as former EDC 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 asks that Schilling and others pay back the bonds floated on the company’s behalf, an amount that could top $100 million when interest is included. It also asks for triple damages. Schilling on Friday also held out the possibility of filing a lawsuit of his own.

“To the extent my attorneys advise me that these claims were improperly filed, I will consider taking such action as necessary against those filing the claims,” he said.

Also Friday, State Police Col. Steven O’Donnell told the AP a criminal investigation of the deal continues. He said he had read part of the lawsuit and learned details that were new to him, although he would not be specific. He would not say whether he believes the state probe of the company will lead to criminal charges, or give a timetable on when the investigation might finish.

A separate federal probe is complete and did not result in charges.