38 Studios founder Curt Schilling and three other former 38 Studios executives have agreed to pay a $2.5 million settlement to the Rhode Island Commerce Corp. in order to get out of the long-running lawsuit brought against 38 Studios stakeholders by the state of Rhode Island.
Pending a judge's approval, this deal will allow Schilling and the others to walk away from a legal imbroglio that's lasted roughly four years and left an indelible mark on the game industry.
38 Studios, of course, went bankrupt in 2012 after helping to develop and publish Kingdoms of Amalur: Reckoning, but before it could release its primary project: a massively multiplayer online game codenamed Copernicus.
The studio had received a $75 million taxpayer-backed loan from the state of Rhode Island, and late in 2012 state representatives filed a lawsuit against stakeholders in the 38 Studios deal alleging that the defendants knew (or should have known) the game company couldn't make good on that loan.
The lawsuit has been a big deal for both the game industry and the state of Rhode Island; it even led state representatives to amend Rhode Island law in 2014 so that defendants in the 38 Studios lawsuit could independently agree to settlements.
That amendment was important because the 38 Studios lawsuit had named more than ten defendants -- everyone from studio founder Schilling to studio funder Wells Fargo. As soon as defendants were allowed to exit the lawsuit via independent settlement they began doing so; Schilling and his compatriots have agreed to the latest in a string of settlements that (according to a USA Today report) accounts for roughly $45 million.
If this settlement is approved, there will only be one defendant left in the lawsuit: First Southwest, the firm that advised Rhode Island on the 38 Studios deal.