38 Studios final defendant agrees to $16 million settlement

PROVIDENCE, R.I. – Rhode Island is settling with the final defendant in its lawsuit over the failure of 38 Studios, the video game company started by former Boston Red Sox pitcher Curt Schilling.

The state Commerce Corporation said Wednesday it has agreed to a $16 million settlement with Dallas-based Hilltop Securities Inc., formerly known as the First Southwest Co.

The settlement was filed Wednesday morning in Rhode Island Superior Court and is contingent on court approval.

Schilling’s video game company moved from Massachusetts to Rhode Island in 2010 in exchange for a $75 million loan guarantee, then went bankrupt less than two years later. First Southwest was the state’s financial adviser on the deal.

Hilltop Securities said Wednesday that the settlement isn’t an admission of liability or wrongdoing.

“It allows our firm to put this matter behind us and move forward on the important work we undertake for municipal clients across the country,” spokeswoman Patti Doyle said.

The state previously settled its claims against Schilling and others involved with the deal, including Wells Fargo Securities and Barclays Capital. If a judge approves Wednesday’s agreement, the combined settlements will total about $61 million.

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