After the collapse of then-ESPN pundit Curt Schilling’s video game company 38 Studios in 2012, there’s been plenty of drama in figuring out what action the state of Rhode Island would take to try to recover some of the $75 million they loaned the company. The state police announced in July that their four-year investigation did not result in criminal charges, but the state has proceeded with litigation against 38 Studios executives and against the banks and investment firms involved in the transaction.
The latest
A Rhode Island Superior Court judge on Tuesday approved a partial $25.6 million settlement in the lawsuit over the state’s disastrous deal with 38 Studios, the video game company started by former Red Sox pitcher Curt Schilling.
Wells Fargo Securities and Barclays Capital Inc. agreed to settle to get out of the lawsuit brought against them and others when 38 Studios failed after receiving a $75 million state loan guarantee. The settlement, approved by Judge Michael Silverstein, brings the amount the state has recovered in the lawsuit to $42 million.
The lawsuit filed by Rhode Island’s economic development agency is still pending against Schilling and other 38 Studios officials, as well as First Southwest, which acted as Rhode Island’s financial adviser in the deal. First Southwest had argued against the latest settlement, saying it relied on a state law that was unconstitutional and unfair. The 38 Studios executives joined that argument.
Silverstein on Tuesday said he had already ruled on similar objections during two previous settlements in the case and rejected the argument.
The lawsuit against the remaining defendants is set to go to trial in October, but the AP report adds that retired judge Francis Darigan (who’s acting as mediator in this case) is still in “active discussions” with the 38 Studios defendants (including Schilling) about a settlement.
It will be interesting to see if that happens, or if we wind up with Schilling and other defendants on the stand this fall.
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