38 Studios Sued by Rhode Island
The Rhode Island Economic Development Corporation is suing the architects of the $75 million loan granted to fallen Kingdoms of Amalur developer 38 Studios. According to WPRI, a suit has been filed against 38 founder Curt Schilling — who lost his baseball fortune following the studio’s collapse — as well as former EDC executive Keith Stokes, 38 Studios CFO Richard Wester, CEO Jennifer MacLean and 38 board member Thomas Zaccagnino. Others named in the suit include former EDC deputy director J. Michael Saul and Rhode Island lawyers Antonio Afonso Jr. and Robert Stolzman.
News of the lawsuit comes just 24 hours before the two year anniversary of the original deal with 38 Studios, which was signed on November 2, 2010. The assets of 38 Studios and Big Huge Games (which was owned by 38) were sold for $830,000 earlier this month, leaving Rhode Island taxpayers responsible for millions of dollars the state still needs to recoup. According to Rhode Island governor Lincoln Chafee, the decision to sue “was not taken lightly and it was taken with the clear goal of protecting the taxpayers of Rhode Island.”
“My message to Rhode Islanders is this,” Chafee said. “I know you work hard for your paychecks, and for your tax dollars to be squandered is unacceptable. The board’s legal action was taken to rectify a grave injustice put upon the people of Rhode Island.”
The suit alleges that “38 Studios failed because of risks that had not been disclosed to the EDC board, but were or should have been known by all of these advisors, and by 38 Studios, and defendants Schilling, Zaccagnino, Wester and MacLean.” It adds that 38 Studios was “undercapitalized by many millions of dollars” and did not disclose that it “was likely to run out of money in 2012.” The full complaint — along with a video statement from Chafee — is available on the Rhode Island EDC’s official site.
38 Studios closed in May and executives testified in bankruptcy court in July. The studio’s assets became property of Rhode Island in August. In addition to a sequel to Reckoning, an MMO called Project Copernicus and set in the Amalur universe was also in development at the time of 38’s collapse.
Andrew Goldfarb is IGN’s associate news editor. Keep up with pictures of the latest food he’s been eating by following @garfep on Twitter or garfep on IGN.