PROVIDENCE – Despite various objections, a Superior Court judge on Sept. 6 approved a $25.6 million settlement between two defendants and the state in the ongoing 38 Studios LLC civil lawsuit.
Superior Court Judge Michael A. Silverstein approved the settlement between the R.I. Economic Development Corp., now known as the R.I. Commerce Corp., and defendants Barclays Capital Inc. and Wells Fargo LLC. The settlement was proposed last month. It evoked objections from other defendants in the case, including First Southwest Co. The financial-planning company was hired as an adviser to the state in 2010 when the EDC issued $75 million in taxpayer-backed bonds for the now defunct video game company founded and owned by former Boston Red Sox pitcher Curt Schilling.
Individual 38 Studios defendants, including Schilling, also objected to the settlement, raising concerns about the constitutionality of 2014 legislation that encourages settlements, according to a court filing released on Sept. 6. Similar arguments were made and addressed in previous settlement decisions. The now-approved settlement increases the state’s total recovered funds to about $42 million.
The lawsuit stems from the EDC accusing company principals, underwriters and economic-development officials of misleading it, causing it to make the decision to issue bonds, which are still being paid back by taxpayers. •