MICHELLE R. SMITH, Associated Press
PROVIDENCE, R.I. (AP) — 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.
“It was a good-faith settlement. There was no evidence to the contrary,” the judge said as he ruled from the bench.
The trial in the case is scheduled to begin in October against the remaining defendants: First Southwest and the 38 Studios officials, including Schilling.
Francis Darigan, a retired judge who is acting as mediator in the case, told The Associated Press after the hearing that he hopes to pick up settlement talks again soon. While he said there has been little discussion with First Southwest, Darigan said he is in “active discussions” with the 38 Studios defendants.
“This is an ongoing effort,” Darigan said.
