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Loan Providers Subpoenaed Following 38 Studios Closure

Posted Thu, Jun 14, 2012 by Martuk

The 38 Studios fallout continues this week following an investigation into the company’s downfall last month. Yesterday the spouse of a former 38 Studios employee told her personal story of tragedy following the studio’s closure, but today more details are circulating news sites. Boston.com reports that the Rhode Island Economic Development Corp., who handled the $75 million loan guarantee deal that brought 38 Studios to the state, and the Bank Rhode Island, have been subpoenaed to testify about the lead-up to the studio’s downfall as part of an ongoing investigation.

The economic development agency handled the $75 million loan guarantee Rhode Island used to lure the company from Massachusetts to Providence last year. Bank Rhode Island made loans to two companies controlled by Michael Corso, a Providence tax credit broker who used state tax credits he agreed to buy from 38 Studios as collateral. 38 Studios applied for, but never received the credits.

The Boston Globe also reports that 38 Studios founder and chairman Curt Schilling has also been named in a lawsuit by Rhode Island-based Citizens Bank, who is seeking $2.4 million in loans that were provided to the company.  The bank has also sued Morgan Stanley Smith Barney, where they believe Schilling maintains financial accounts.

RBS Citizens, owned by the Royal Bank of Scotland, said Schilling personally guaranteed the debt to the bank on October 26. But, RBS Citizens said, “Schilling has failed and refused” to pay it. “This is a straightforward matter of liability,” RBS Citizens said in the lawsuit, filed last week.

Over the last few weeks industry insiders, Curt Schilling, former employees and a former employee's spouse have spoke out about the downfall of 38 Studios with tales of personal tragedy, what went wrong, the studio's downfall and political shenanigans. It's a sad tale any way you slice it, so stay tuned and we'll update you when we have more.

via Gamasutra
Sources: Boston.com, The Boston Globe

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