38 Studios Investigation Begins Following Bankruptcy Filing
A state and federal investigation into 38 Studios gets underway following the companys filing for Chapter 7 bankruptcy protection.
Theres more crushing news for Curt Schillings 38 Studios this week. According to a report from WPRI, 38 Studios LLC and its three subsidiaries have filed for Chapter 7 bankruptcy protection and will begin liquidation of assets. The report notes that court documents indicate that 38 Studios LLC owes more than $150 million to over 1,000 creditors, a majority of which reside in Rhode Island, including the $75 million loan guarantee in the deal that brought the company to the state, which is estimated to cost $115.9 million. The parent company's assets are estimated to be worth 21.7 million, including $12.8 million on deposit with the Rhode Island Economic Development Council.
Additionally, the report states that 38 Studios Baltimore LLC, formerly Big Huge Games, owes roughly 5.5 million to 28 creditors with assets valued between $335,208, while a third subsidiary, Mercury Project LLC, disclosed no assets and a $1.9 million debt to EA as part of a three-party agreement with City National Bank of Beverly Hills, California, and International Film Guarantors in Santa Monica, California.
State and federal agencies also confirmed that they have opened an investigation into 38 Studios regarding the money that came from the state and a loan from the Bank of Rhode Island, which loaned the company $8.5 million earlier this year using tax credits that had not been issued to the firm.
"The state police, the attorney general's office, the U.S. Attorney's office and the FBI are opening an investigation into 38 Studios, both the money that came from the state as well as the money that came from Bank Rhode Island," Rhode Island State Police Col. Steven O'Donnell told WPRI.com on Thursday afternoon.
Last month Curt Schilling spoke about the problems of the studio and pointed to comments from Rhode Island Governor Lincoln Chafee as part of the reason the studio lost a major publishing deal.
No further comments were given on the investigation. Stay tuned and well update you when we have more on the 38 Studios situation.
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