Settlement in 38 Studios Case Ends Lawsuit Over Failed Deal - NECN
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Settlement in 38 Studios Case Ends Lawsuit Over Failed Deal

A judge approved a $16 million settlement



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    A judge approved a $16 million settlement with the final defendant in the 38 Studios case on Friday, ending the lawsuit over Rhode Island's failed $75 million deal with former Boston Red Sox pitcher Curt Schilling's video game company.

    Superior Court Judge Michael Silverstein heard from the state economic development agency and the state's financial adviser on the deal, and then approved the settlement.

    38 Studios moved from Massachusetts to Rhode Island in 2010 in exchange for a $75 million loan guarantee, and then went bankrupt. The lawsuit was filed in 2012.

    "It was easy to get started, not so easy to get finished," said Max Wistow, who represents the state Commerce Corporation. "We feel like it was worthwhile."

    Combined settlements in the case total about $61 million. The Commerce Corporation agreed to the $16 million settlement with Dallas-based Hilltop Securities Inc. Hilltop was formerly the First Southwest Co., the state's financial adviser on the deal.

    Democratic Gov. Gina Raimondo says now that the case is over, she'll file a petition in court to seek the release of documents from the grand jury investigation.

    "I've fought hard to recover as much taxpayer money as possible and am pleased that Judge Silverstein has approved our last settlement," Raimondo said in a statement. "Now that the civil case and criminal case is closed, we should make all the documents available to the public and give the people of our state closure."

    Still pending is a U.S. Securities and Exchange Commission lawsuit against Wells Fargo and the economic development agency, accusing them of making misleading statements about bonds used to fund the deal.

    The SEC and the economic development agency have entered into a tentative settlement agreement, but they are still awaiting approval from the SEC, Wistow said. He said they're hoping to get that ``momentarily.'' The terms of the tentative agreement haven't been released.

    Schilling has said his company failed because it didn't raise enough money, not because he did anything malicious or illegal. He also has faulted Rhode Island politicians for giving him a loan guarantee in the first place.

    After a yearslong criminal investigation, Rhode Island Attorney General Peter Kilmartin and state police said in July that no criminal charges would be filed, but the investigation was kept open. Kilmartin said last week that he was closing that dormant investigation.

    Kilmartin has voiced concerns about releasing investigative records from the case. Raimondo says Rhode Island residents have a right to know what happened.

    Rhode Island State Police Col. Ann Assumpico has directed her agency to review and release the non-grand jury documents in their possession, Raimondo said Friday.

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