38 Studios hands over bad $1.125m check to state, can't pay its employees (update)

Kingdoms of Amalur: Reckoning pays it debts, but can't make payroll.

Former Red Sox pitcher Curt Schilling's video game company attempted to make good on an overdue payment to Rhode Island's Economic Development Corporation today. Unfortunately, financially troubled 38 Studios didn't actually have the funds to cover the million dollar check it cut.

The studio behind Kingdoms of Amalur: Reckoning handed over a check to state for the $1.125 million "annual guarantee fee" payment it defaulted on earlier this month, according to a report from WPRI. Afterward, the company's CFO informed the state that 38 Studios had insufficient funds to cover the check. So the state sent it back.

The company also couldn't make payroll this week, according to the report.

Schilling's 38 Studios employed 379 people full-time as of March 15, according to loan documents cited by WPRI. The developer is currently working on a massively multiplayer online game titled Project Copernicus. It released Kingdoms of Amalur: Reckoning through publisher EA in February. The game reportedly sold 330,000 units in its first month on the market and was positively received by critics. Last month, 38 released a downloadable expansion pack for the game titled Teeth of Naros.

The developer isn't showing any games at next month's E3, but is expected to attend the show.

38 Studios reps met with Rhode Island's EDC this week for an emergency meeting after it defaulted on the million dollar repayment, seeking financial assistance on top of development board's $75 million loan guarantee. State officials say they're hoping to keep the game studio solvent, but will not make any further decisions until Monday.

In the wake of studio's economic troubles and the controversy surrounding the state-backed loan, RIEDC director Keith Stokes resigned today, according to an earlier report from WPRI.

Polygon has reached out to 38 Studios seeking comment, but has not yet received a response.

Update: WPRI's original report – and ours – indicated that the $1.125 million payment from 38 Studios was largely a done deal. We've updated our story to clarify that the developer delivered a check to Rhode Island officials that could not be cashed due to insufficient funds. We've reached out to the Rhode Island Economic Development Corporation seeking further clarification.

Update 2: 38 Studios founder Curt Schiling's picture and profile have been removed from the "Visionaries" page of the developer's web site. (A Google cached version of that page shows Schilling's now-missing profile.) It's not clear if that means that Schilling has left the studio he founded, as requests for clarification have gone unanswered. A call to 38 Studios senior VP of business operations Mark Hansen was met with "No comment." Email and phone calls to 38 Studios PR have not yet yielded a response.

Schilling's not the only 38 Studios lead to have been removed from the site. Jennifer MacLean, CEO, and Bill Thomas, COO, have had their profiles scrubbed from 38studios.com's management page recently. MacLean is reportedly on maternity leave.

Update 3: The three missing 38 Studios executive profiles have been restored to the company's web site.

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