First Southwest objects to deal over Schilling's 38 Studios

Markets Associated Press

The company that acted as financial adviser to the state of Rhode Island in its $75 million deal with video game company 38 Studios is objecting to a partial settlement in a lawsuit brought over the deal.

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38 Studios was started by former Red Sox pitcher Curt Schilling. It failed less than two years after getting the loan guarantee.

First Southwest filed an objection Monday to a proposed $25.6 million settlement announced last week with Wells Fargo Securities and Barclays Capital Inc.

First Southwest's filing takes issue with a state law passed to encourage settlements in the case. First Southwest says it has the effect of strong-arming others to pay for the state's mistakes.

A state Superior Court judge has scheduled a hearing about the settlement proposal for Sept. 6.