R.I. settles for $25.6M with Schilling backers
PROVIDENCE, R.I. — Rhode Island has reached a $25.6 million settlement with two of the financial backers it sued over a disastrous deal with former Red Sox pitcher Curt Schilling's 38 Studios video game company. The state's Commerce Corp. announced yesterday that it has agreed to the proposed settlement with Wells Fargo Securities and Barclays Capital Inc. The settlement was filed yesterday in Rhode Island Superior Court and is contingent on the court's approval.
The company founded by Schilling moved from Massachusetts to Rhode Island in 2010 after the state's economic development agency agreed to give it a $75 million loan guarantee. The deal was financed through bonds offered to investors. Less than two years later, 38 Studios ran out of money and filed for bankruptcy.
The state says it's still in litigation with First Southwest Co. and Schilling.
The new settlement brings to $42 million the amount the state has recovered from parties involved in the deal.
Retired Superior Court Judge Francis Darigan, Jr., who was called in as a mediator to help broker the settlement, told reporters yesterday that negotiations are ongoing with the other parties and he is hopeful they can agree to a settlement before a trial scheduled for October. But he described Wells Fargo and Barclays as the biggest players and said he's doubtful the state will be able to recover from the remaining parties the nearly $40 million it says it's still owed.
Gov. Gina Raimondo said in a statement yesterday that the settlement is a big step in recovering taxpayer money lost to a bad deal.
“Rhode Islanders understandably feel hurt by this deal — and I do too — but I want everyone to know that we are demanding accountability, getting money back and moving the state forward,” she said.