Curt Schilling and other executives settle 38 Studios lawsuit for $2.5 million

It’s been a big few days for former ESPN analyst Curt Schilling, who had his new syndicated conservative radio show debut Saturday, made headlines with a Facebook post Sunday suggesting that he’d stop terrorism by suspending immigration and try terrorism suspects by military commission instead of trial (logic which has since been used against him), and reached a settlement Monday with the state of Rhode Island’s economic development agency in its lawsuit against him and others over a $75 million state loan guarantee made to his 38 Studios video game company before its 2012 bankruptcy.

Wells Fargo Securities and Barclays Capital Inc. agreed to pay $25 million in a partial settlement earlier this month, but the suit was still pending against Schilling and other 38 Studios executives as well as Rhode Island financial advisor First Southwest. Monday’s settlement, if approved by a judge, will see Schilling and the others pay $2.5 million to settle the claims against them, bringing the total the state has recovered to close to $45 million and leaving First Southwest as the only remaining defendant. Here’s more on the deal from The Associated Press, including that it was made partly because the defendants “wouldn’t have the personal assets to satisfy a judgment.”

Lawyers for the Commerce Corp. asked the court to approve the settlement, saying in court documents that it’s a “highly unusual case” in which it “makes no economic sense whatsoever” for the parties to proceed to trial rather than proceed with the proposed settlement.

They said that even if the agency prevailed at trial, the defendants would have exhausted the insurance coverage in paying for the trial and wouldn’t have the personal assets to satisfy a judgment. The state reviewed the defendants’ assets.

Schilling has previously denied wrongdoing and said the company failed because the state didn’t do enough to help him. The settlement agreement says that the defendants deny liability and the settlement is not to be construed as an admission of liability by any of them.

Democratic Gov. Gina Raimondo reiterated Monday that she thinks 38 Studios was a bad deal for the state’s residents. She said she’s focused on recovering as much taxpayer money as possible and her team is preparing for trial with the remaining defendant.

About $2 million from Monday’s settlement will be applied to paying back bonds, according to the Commerce Corp. It said Rhode Island taxpayers would still owe about $28.2 million on the bonds.

If that settlement is approved, it should end Schilling’s legal troubles, as the state police decided in July not to file criminal charges after a multi-year investigation into 38 Studios. Settling the 38 Studios lawsuit may also help if Schilling plans to go through with his idea of running for U.S. Senate in 2018. However, the memory of the 38 Studios deal and how badly it ended may still pose a challenge for his political career.

[USA Today]