MATT O’BRIEN, Associated Press
PROVIDENCE, R.I. (AP) — Rhode Island is settling with the final defendant in its lawsuit over the failure of 38 Studios, the video game company started by former Boston Red Sox pitcher Curt Schilling.
The state Commerce Corporation said Wednesday it has agreed to a $16 million settlement with Dallas-based Hilltop Securities Inc., formerly known as the First Southwest Co.
The settlement was filed Wednesday morning in Rhode Island Superior Court and is contingent on court approval.
Schilling’s video game company moved from Massachusetts to Rhode Island in 2010 in exchange for a $75 million loan guarantee, then went bankrupt less than two years later. First Southwest was the state’s financial adviser on the deal.
Hilltop Securities said Wednesday that the settlement isn’t an admission of liability or wrongdoing.
“It allows our firm to put this matter behind us and move forward on the important work we undertake for municipal clients across the country,” spokeswoman Patti Doyle said.
The lawsuit was filed in 2012 by then-Gov. Lincoln Chafee. The state has since settled its claims against Schilling and others involved with the deal, including Wells Fargo Securities and Barclays Capital. If a judge approves Wednesday’s agreement, the combined settlements will total about $61 million.
Schilling has said his company failed because it didn’t raise enough money, not because he did anything malicious or illegal, and that he has apologized to his former employees. He has also faulted Rhode Island politicians for giving him a loan guarantee in the first place.
Democratic Gov. Gina Raimondo said Wednesday she is pleased with the settlement but that now that the civil case is ending, she will immediately petition for the release of all documents from a separate grand jury investigation into the 38 Studios deal.
State law enforcement officials announced in July that there would be no criminal charges following a yearslong investigation. They have declined to release the documents because the investigation, though inactive, remains open.
“Rhode Islanders deserve to have access to all of the information that is known,” Raimondo said in a Wednesday statement. “Complete transparency is the best way to ensure that such a disastrous deal never happens again.”
