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Rhode Island Sues Over 38 Studios Loan Default

Posted on November 1, 2012 AT 03:42pm

Who knew Reckoning would end up being such an ironic name when 38 Studios released its first and only game last February.

Today the state of Rhode Island and the Rhode Island Economicment Development Corporation (RIEDC) sued former Major League baseball star Curt Schilling, former 38 Studios CEO Jennifer MacLean and more than a dozen others, including banks, lawyers and apparently anyone else attorneys for the state could think of.

The action stems from a $75 million load from the RIEDC to 38 Studios in 2010. Meant to fund the development of Kingdoms of Amalur: Reckoning as well the unfinished MMORPG based in the same universe known as Project Copernicus. Last May, 38 Studios defaulted on the loan and declared bankruptcy, shuttering both its main studio and Big Huge Games, which it acquired from THQ in 2009.

An auction for the company’s material goods — everything from computers to office chairs — bought in about $830,000, a drop in the bucket compared to the $150 million the company owes in total. The auction did not include the work-in-progress MMO nor the Amalur IP, which are both expected to be sold at a later date.

Today’s lawsuit is meant to recoup a very public loss that Rhode Island governor Lincoln Chafee is taking very seriously. Below is a video the governor released today in conjunction with the filing. His statement can be boiled down to this: “The Board’s legal action was taken to rectify a grave injustice put upon the people of Rhode Island. You have my commitment that I will continue fighting to protect the interest of all Rhode Islanders every day that I am Governor.”

While we do not fault governor Chafee or the RIEDC for taking these actions, it pains us to see a game company with such a promising IP slide further and further into oblivion. And even if the accusations of mismangement are true, we feel a little sorry for Schilling who reportedly lost $50 million, most of what he bankrolled from his days in the MLB, on his dream of making world class games.

Aspiring lawyers can read the nearly 100 page compaint here.

What do you think about the fall of 38 Studios? Tell us below:

Marc Camron, Senior Editor
Marc Camron is pleased to finally get a little bit of time to enjoy new games this holiday season, even if Batman: Arkham Knight isn't one of them. The rest of the time will be spent getting ready for CES in Vegas, starting on January 5th. At least it should be warmer there than in Colorado.

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