$2.5m 38 Studios lawsuit settlement approved by Judge

The long, long running saga of Curt Schilling’s 38 Studios and its failed effort to develop a Kingdoms of Amalur MMO with Rhode Island public funds appears to be over. An agreed upon settlement of $2.5 million USD was announced earlier in the week, and today that settlement was approved by Judge Michael A. Silverstein.

Former Red Sox man Schilling and three other executives of 38 Studios (Thomas Zaccagnino, Richard Wester, and Jennifer MacLean), plus studio insurer ‘Starr Indemnity and Liability Co’ have agreed to pay up to settle the case brought by Rhode Island authorities. Rhode Island issued bonds worth $75 million USD to 38 Studios in 2010, as part of a successful effort to encourage the studio to set up in their state.

An action-RPG, Kingdoms of Amalur: Reckoning was released in February 2012 as a supposed precursor to the MMO. However, by May 2012, 38 Studios was defaulting on a $1.1 million USD bond interest payment. Within a month, the mismanaged studio had shut down and declared bankruptcy.

The $2.5 million settlement is just one payment recouped by Rhode Island (other lawsuits have targeted investment banks involved in the deal), which to date total around $45 million USD. Citing trial documents, the Boston Globe reports “This is 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.”

Starr Indemnity have already burned through $7.5 million of their $10 million insurance policy defending the case, and, under oath, Schilling and the other parties claimed their current assets were worth less than $2.5 million. In effect, the settlement represents anything that’s left of value from 38 Studios.