Ex-Red Sox Pitcher Curt Schilling Agrees To 38 Studios Settlement

Former Red Sox pitcher Curt Schilling and others have agreed to pay $2.5 million to settle their part of a lawsuit brought over Rhode Island's disastrous $75 million deal with 38 Studios, his failed video game company.

The settlement agreement with Schilling and other 38 Studios officials was announced Monday by the Rhode Island Commerce Corp.

Retired Superior Court Judge Francis Darigan, who was acting as mediator in the case, was scheduled to hold a news conference Monday morning to discuss the deal.

The settlement must still be approved by a judge. If approved, it would bring the amount of settlements in the case to approximately $45 million.

The only remaining defendant would be First Southwest, which acted as Rhode Island's financial adviser in the deal.

Lawyers for the Commerce Corp. asked the court to approve the settlement, saying in court documents that it's a "highly unusual case" in which it "makes no economic sense whatsoever" for the parties to proceed to trial rather than proceed with the proposed settlement.

They said that even if the agency prevailed at trial, the defendants would have exhausted the insurance coverage in paying for the trial and wouldn't have the personal assets to satisfy a judgment. The state reviewed the defendants' assets.

Schilling has previously denied wrongdoing and said the company failed because the state didn't do enough to help him. The settlement agreement says that the defendants deny liability and the settlement is not to be construed as an admission of liability by any of them.

Democratic Gov. Gina Raimondo reiterated Monday that she thinks 38 Studios was a bad deal for the state's residents. She said she's focused on recovering as much taxpayer money as possible and her team is preparing for trial with the remaining defendant.

About $2 million from Monday's settlement will be applied to paying back bonds, according to the Commerce Corp. It said Rhode Island taxpayers would still owe about $28.2 million on the bonds.

Rhode Island last month reached its biggest settlement in the case, amounting to $25.6 million from Wells Fargo Securities and Barclays Capital Inc.