Insurer Starr Indemnity and Liability is on the hook for a settlement over former Red Sox Pitcher’s failed video game business, according to a Boston Globe report.
Former pitcher Curt Schilling agreed to the $2.5 million settlement Monday, according to the Globe. The settlement ends a Rhode Island investigation into a $75 million financing package for Schilling’s failed company, 38 Studios. Schilling agreed to the deal despite having called the investigation a “fake-ass witch hunt” only two months ago, the Globe reported.
Schilling had launched his company with the intent to create a complex, “World of Warcraft”-style game, according to the Globe. In 2010, Rhode Island officials agreed to issue $75 million in bonds in order to lure the company and create jobs in the state. 38 Studios received about $50 million the first year, with the rest of the money to be set aside for reserves and to pay banking fees.
But the company defaulted on a $1.1 million interest payment in May of 2012. By June, it had declared bankruptcy. Rhode Island authorities filed the lawsuit, along with several others against other involved parties, after 38 Studios went bankrupt, according to the Globe.
Schilling, meanwhile, claimed the company failed because the state didn’t do enough to support it, according to a USA Today report. Indeed, Monday’s settlement agreement said that the defendants denied any liability, and that the settlement shouldn’t be construed as an admission of liability.
The settlement still has to be approved by the court, according to USA Today. Lawyers for the plaintiff, the Rhode Island Commerce Corp., are urging that the court approve it. According to the Rhode Island Commerce Corp., it “makes no economic sense whatsoever” for the case to go to trial.
If the settlement is approved, it will effectively end Schilling’s involvement in the case, according to an AP report. Counting Monday’s settlement, Rhode Island has recouped about $45 million through various lawsuits, according to USA Today.