Commerce RI reaches settlement in 38 Studios

PROVIDENCE – The R.I. Commerce Corp. has agreed to a $25.6 million settlement with two more defendants in the ongoing 38 Studios LLC civil lawsuit.

The proposed settlement is between Commerce RI, formerly known as the R.I. Economic Development Corp., or EDC, and defendants Wells Fargo Securities LLC and Barclays Capital Inc.

The lawsuit stems from accusations that the state was misled by the principals, underwriters and economic development officials when it issued $75 million in taxpayer-backed bonds to fund the failed video game company 38 Studios in 2010. Two years later, the company – headed by former Boston Red Sox pitcher Curt Schilling – filed for bankruptcy, leaving taxpayers on the hook to pay back the bonds.

Speaking with reporters on Aug. 23, the retired state judge who led the mediation said the negotiated settlement was a victory for taxpayers as well as the entities who reached agreement.

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The settlement figure is an aggregate amount to be paid by Wells Fargo Securities and Barclays Capital. •