Proposed settlement reached in 38 Studios bankruptcy case

CURT SCHILLING, former Red Sox pitcher and founder of 38 Studios LLC, unveils the new
CURT SCHILLING, former Red Sox pitcher and founder of 38 Studios LLC, unveils the new "Kingdoms of Amalur: Reckoning" video game during the Electronic Arts Inc. annual Studio Showcase in Redwood City, California, U.S., on Tuesday, July 20, 2010. A proposed settlement has been reached in the federal bankruptcy case involving 38 Studios. / BLOOMBERG FILE PHOTO/TONY AVELAR

PROVIDENCE – A proposed financial settlement has been reached in the federal bankruptcy case involving Curt Schilling’s former 38 Studios video game company.
According to an Oct. 20 filing at the U.S. Bankruptcy Court in Delaware, the former directors, which includes former Boston Red Sox pitcher Schilling, and three other former officers, will have their insurance company, Starr Indemnity and Liability Co., pay $300,000 to trustee Jeoffrey L. Burtch to settle financial claims.
“The trustee believes that collection upon any favorable judgment will be uncertain at best. The policy has been eroded by several million dollars by virtue of the Rhode Island litigation, and would likely be totally exhausted as a result of the continued pursuit of the Rhode Island litigation and litigation of the potential claims in the bankruptcy court – leaving the trustee to look to the former directors and/or officers’ personal assets for a recovery,” the filing reads.
“The trustee reviewed and evaluated the former directors and/or officers’ financial wherewithal to satisfy a judgment, and concluded that collection of any favorable judgment against of the former directors and/or officers would be difficult, if not fruitless,” it stated.
The settlement still has to be approved by the federal Bankruptcy Court.
The proposed agreement will not affect the ongoing suit filed by Rhode Island’s economic development agency, which also names Schilling. The Associated Press reported that the agency claimed its board was duped into approving a $75 million loan guarantee for the video game company.
The bankruptcy agreement states that the parties deny wrongdoing and that they entered into it with the consent of Starr to avoid the need for more litigation that will decrease the amount of insurance available under the policy to continue the defense of the Rhode Island litigation.

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