Curt Schilling's game studio struggles to stay afloat

A missed loan payment to the state of Rhode Island by Kingdoms of Amalur: Reckoning developer 38 Studios kicked off a chain of events that cast light on a studio seemingly struggling to stay afloat. The studio defaulted on a $1.125 million loan payment to the Rhode Island Economic Development Corporation on May 1. During a series of meetings with the state, 38 Studios said they couldn't pay their employees and asked for more help from Rhode Island. The studio later delivered a payment to the state, but then said they couldn't cover the check. Meanwhile, the director of the Economic Development Corporation resigned. 38 Studios is currently working on a massively multiplayer online game codenamed Copernicus, according to the official website for the company. Founded in 2006 in Massachusetts as Green Monster Games, 38 Studios was lured to Rhode Island in 2010 by a $75-million loan guarantee from the state. At the time state officials argued that the studio would bring hundreds of jobs and millions in tax revenue to the state.

Dozens of 38 Studios depositions have to be performed by mid-August

There are "about three dozen" depositions that must be performed in the 38 Studios lawsuit before Aug. 15, The Associated Press reports.

The mid-August date represents the end of the lawsuit's evidence-gathering phase. Max Wistow, the former Rhode Island Economic Development Corporation's lead attorney, revealed that depositions began last October.

Rhode Island filed suit against former members of 38 Studios and the EDC in November 2013, claiming that it was not given adequate information about the risks associated with the $75 million loan guarantee provided by the state. Former Red Sox...

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It costs more than $15K a month to keep 38 Studios alive

Richard J. Land is the court-appointed receiver charged with overseeing and selling — in two public auctions thus far — the company's remaining assets. Easley is his technical man on the inside, a caretaker for the only game 38 Studios ever shipped, Kingdoms of Amalur: Reckoning (pictured above), and the unreleased massively multiplayer online role-playing game known as Project Copernicus.

"We've got what amounts to, in some respects, a playable game," Land said. "Does that mean you can buy a disc and pop it into...

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Rhode Island pursues 38 Studios figures on lobbying law grounds

38 Studios founder Curt Schilling, plus a board member of the defunct studio and and two others have been ordered to appear before a hearing in Rhode Island to determine if they violated that state's laws by lobbying for a $75 million state loan without registering with the state as lobbyists.

The development is the latest in the ongoing cleanup of 38 Studios' 2012 collapse. Schilling's studio set up shop in Rhode Island to get a $75 million loan guaranteed by the state, and with the money developed Kingdoms of Amalur: Reckoning and started work on an MMO based on the Amalur canon.

B...

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Paying 38 Studios debt took RI off S&P CreditWatch list, House speaker says

Paying 38 Studios debt took Rhode Island off of credit rating agency Standard & Poor's CreditWatch list, House Speaker Nicholas Mattiello said.

S&P removed Rhode Island from the list last Wednesday, Portsmouth Patch reports. S&P uses the list to "indicate a substantial likelihood of it taking a rating action within the next 90 days, or in response to events presenting significant uncertainty to the creditworthiness of an issuer," according to the agency.

"This affirmation from S&P shows that our decision was sound and will ensure protection of the state’s investments and reputation,"...

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Rhode Island police to interview lawmakers involved in 38 Studios job creation plan

Rhode Island state police plan to interview the lawmakers who voted on the job creation plan resulting in the the $75 million state-backed loan given to now-defunct developer 38 Studios, reports the Boston Herald.

R.I. House Speaker Nicholas Mattiello said that on Tuesday he was contacted by state police about the issue. Police "informed that they would like to ask questions of every member, past and present, who participated in the voting" on the program. Mattiello said he would be passing along phone numbers of involved lawmakers to police, unless there are any objections — to which one...

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RI House chairwoman wants a hearing on bill to prevent payment of 38 Studios debt

Rep. Karen MacBeth, chairwoman of the Rhode Island House Committee on Oversight, wants a hearing on her bill to prohibit payment of the 38 Studios debt, The Associated Press reports.

MacBeth wrote a letter to Speaker Nicholas Mattiello to protest that her bill did not receive a hearing within 30 days of being submitted.

"I am objecting to the failure of the House Finance Committee to adhere to the rule referenced above and hereby request that you order the immediate discharge of said bill," the letter reads.

MacBeth proposed legislation in 2013 and in 2014 that would prevent the state...

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Protestors oppose repayment of 38 Studios bond

Last Thursday, a small group of protestors gathered outside the Rhode Island State House to express opposition to the repayment of the state's $75 million bond given now-defunct 38 Studios, reports The Providence Journal.

The group included several local political figures — including second-time Democratic governor candidate Todd Giroux and CEO of the Republican Party's Center for Freedom and Prosperity Mike Stenhous — as well as a handful of members of the R.I. Tea Party, Green Party and Occupy Providence.

“This former Red Sox player doesn’t think that we, the taxpayers, should be...

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Don't repay 38 Studios loan, says Rhode Island Libertarian Party

The Libertarian Party of Rhode Island doesn't believe the state is obligated to repay the loan that it gave to bankrupt game developer 38 Studios; instead, Rhode Island should refuse to pay, the organization said yesterday.

"So-called 'moral obligation' bonds are neither moral, nor a legitimate financial obligation," said Mike Rollins, chairman of the Libertarian Party of Rhode Island, in a statement yesterday. "All such bonds deliberately bypass the official procedures for voter approval of government expenditures."

Kingdoms of Amalur: Reckoning (screenshot above) developer 38 Studios...

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RI House Speaker: State should repay 38 Studios debt

Rhode Island House Speaker Nicholas Mattiello believes the state should repay debtors who backed the failed $75 million loan guarantee to former Red Sox pitcher Curt Schilling's bankrupt 38 Studios, The Associated Press reports

Mattiello made his comments after he and House Majority Leader John DeSimone met with representatives from credit rating agencies Moody's and Standard & Poors last week. 

"We need to pay to protect the credit rating of Rhode Island," Mattiello said. "I am not going to put Rhode Island on the default list. The reputation of the state will not be harmed any...

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38 Studios board member wanted to keep possibly 'under capitalized' MMO secret

38 Studios' lead board director Thomas Zaccagnino advised others involved with Rhode Island's proposed $75 million loan guarantee to the studio to keep part of its risky financial standing from those approving the guarantee, WPRI reports

On July 1, 2010, Zaccagnino responded to an email from CEO Jen MacLean, who was concerned that the state might not provide the full $75 million. According to WPRI, she also wrote that she wasn't comfortable telling the state that the funds would be insufficient to cover the full cost of 38 Studios' in-development massively multiplayer online...

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RI government rehires company it's suing as part of 38 Studios bankruptcy

The Rhode Island government will continue to work with First Southwest as the state's financial adviser, even though the state is suing the financial firm for its alleged role in the 38 Studios bankruptcy, reports the Providence Journal.

Governor Lincoln Chafee (photo above) and Gina Raimondo, the state's general treasurer, approved a new two-year contract with First Southwest in March. First Southwest, an investment bank with offices around the U.S., including in Lincoln, Rhode Island, has served as the state's financial adviser since 2001.

First Southwest was one of the entities...

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RI needs to pay 38 Studios debt in light of economic consequences, says governor

Rhode Island governor Lincoln Chafee defended the necessity of paying 38 Studios' debt in order for the state to continue its recovery from the recession and recoup taxpayer money.

Chafee's stance aligns with a report from SJ Advisors earlier this month suggesting the state of Rhode Island would face a reduction in its bond rating to junk status if it stopped paying the outstanding balance on the failed loan guarantee to developer 38 Studios.

"The candidates who can't understand these two obvious truths are unfit to be Governor," he said in a statement this week. "The consequences of...

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38 Studios loan default could reduce RI bond rating to junk status, study says

If Rhode Island chose to default and stop paying on the outstanding balance of its failed loan guarantee to developer 38 Studios, it could reduce the state's bond rating to junk status, according to a report by SJ Advisors (PDF link) released today by The Rhode Island Department of Administration. 

"Report on Rhode Island’s Moral Obligation on the 38 Studios Bondsanalyzes the potential impact of defaulting on the debt and the "reputational impacts" of nonpayment. It also considered the impacts of continuing to make payments and a "test the waters" scenario in which the government stopped...

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RI to pay $2.4 million to 38 Studios investors with state funds

Rhode Island will make an interest payment of $2,431,506 to the investors who backed the failed 38 Studios loan guarantee today, the Providence Journal reports.

Today's payment marks the first time that the state will use funds not previously earmarked for payments. Funds for previous payments, including the last payment made Nov. 1, 2013, came from "money set aside in reserve at the outset of this doomed venture."

Rhode Island, through the Rhode Island Economic Development Corporation (now known as the Rhode Island Commerce Corporation), backed the 38 Studios loan guarantee in 2010....

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RI's new House Oversight chairwoman wants 38 Studios subpoenas

Rhode Island Rep. Karen MacBeth, the newly appointed charwoman of the House Committee on Oversight, may issue subpoenas related to the state's lawsuit over the failed $75 million loan guarantee to 38 Studios, The Associated Press reports.

MacBeth, who was named chairwoman yesterday, would issue subpoenas looking for answers about the loan and the studio's collapse.

"I would look to bring anybody that I think can give us answers," MacBeth said. "The state wants answers about what happened. I think it's my duty to get answers now."

MacBeth's subpoenas would not be the first pertaining to...

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RI governor has 'confidence' in 38 Studios lawsuit as state senator calls for transparency

Rhode Island Gov. Lincoln Chaffee has "a lot of confidence" in the direction of the state's lawsuit against 38 Studios and members of the former Rhode Island Economic Development Corporation.

According to The Providence Journal, the governor made his comments in the wake of a closed-door meeting with representatives from the Rhode Island Commerce Corporation (formerly the RIEDC) Monday.

The state filed suit in November 2012 over the $75 million loan guarantee provided in 2010, claiming that those involved in...

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RI hires analyst to review a possible default on 38 Studios debt

The state of Rhode Island is looking into the financial impact of a possible default on the 38 Studios bonds, according to the Providence Journal.

The Chafee administration has hired analyst Steven J. Johnson to begin a "robust" study of both the financial and reputational impact that could result by defaulting on a loan guarantee the state gave bondholders who assumed financial responsibility for the game studio.

Following the studio's filing for bankruptcy in 2012, bondholders were owed roughly $112.6 million, including $75 million in initial borrowing and $37.6 million in interest over...

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RI senator denied access to 38 Studios case documents

Rhode Island state Senator James Sheehan's request for copies of documents pertaining to the case surrounding defunct developer 38 Studios has been denied by the Rhode Island Commerce Corporation's attorney, reports the North Kingstown Patch.

Last month, Sheehan asked for copies of "all depositions and exhibits" related to the civil lawsuit filed against companies and individuals that were involved in the initial $75 million loan guarantee granted to 38 Studios in July 2010.

Sheehan, who is the state's Chairman of the Senate Committee on Government Oversight, requested the documents —...

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Judge denies request to end 38 Studios loan adviser questioning

A Rhode Island judge denied a request that would have prevented further questioning of a financial adviser involved in the state's $75 million loan guarantee to 38 Studios, The Providence Journal reports.

R.I. Superior Court Judge Michael A. Silverstein denied the request from First Southwest, a financial advisory firm. Maureen Gurghigian, a senior vice president at its Lincoln, R.I. office, has undergone questioning twice in the ongoing lawsuit that the state filed in November 2012 against members of 38 Studios and the Rhode Island Commerce Corporation (formerly known as the Rhode Island...

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RI senator seeks 38 Studios records to answer questions

Rhode Island state Senator James Sheehan requested copies of "all depositions and exhibits" pertaining to the civil lawsuit filed against the people and companies involved in the $75 million loan guarantee provided to 38 Studios.

According to a press release from the Rhode Island General Assembly, Sheehan believes "this information will help answer many questions still left unanswered about how the ill-fated deal came about."

Sheehan sent a letter earlier this week to Thomas E. Carlotto, the attorney from Shechtman Halperin Savage representing the Rhode Island Commerce Corporation...

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RI House passes 38 Studios settlement bill

The Rhode Island House of Representatives approved a bill yesterday that is said to encourage settlements in litigation surrounding the collapse of Curt Schilling's 38 Studios, reports NBC 10.

The bill, which passed by a vote of 53-16, was unanimously approved by the state Senate last month. After final votes, it will go to the desk of Rhode Island Gov. Lincoln Chafee.

According to the legislation's supporters, it is designed to facilitate out-of-court settlements in lawsuits between the state government and a number of 38 Studios officials. If the bill becomes law, any defendant who...

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Smedley: RI gov an 'idiot' for trash talking Schilling's MMO

Sony Online Entertainment president John Smedley called out Rhode Island governor Lincoln Chafee on Twitter last night, stating the politician was an "idiot" for trash talking 38 Studios' troubled massively multiplayer RPG Project Copernicus.

"I had the good fortune of seeing the game," wrote Smedley. "It looked great. If that idiot Governor Chafee hadn't trash talked right at the time Curt was trying to get funding you would be playing the game now."

Smedley also mentioned 38 Studios' Curt Schilling came to SOE for funding; however, the company never agreed on a deal.

"Anyone with a...

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RI House to vote on 38 Studios settlement bill next Tuesday

The Rhode Island House of Representatives will vote next Tuesday on a bill designed to encourage settlement in the lawsuit filed against former Red Sox pitcher Curt Schilling's 38 Studios, The Associated Press reports.

The bill will make its way to the floor after the House's Judiciary Committee unanimously approved the legislation earlier this week. The Rhode Island Senate unanimously approved the legislation last week.

38 Studios declared bankruptcy in June 2012. Later that year, the state filed suit over the $75 million loan guarantee it provided to 38 Studios in 2010. Early this year,...

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RI House committee to vote on 38 Studios settlement bill

The Rhode Island House of Representatives' Judiciary Committee will vote on a bill today designed to encourage out-of-court settlements in the 38 Studios lawsuit, The Associated Press reports.

If approved, the full House could vote on the bill later this week. The Rhode Island Senate unanimously approved the legislation last week.

As the House mulls the legislation, The Providence Journal reports that no "lawmaker or high-ranking politician" has been called for testimony in the case.

Governor Lincoln Chafee's office first submitted legislation to encourage settlements in the lawsuit...

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RI lawmakers propose bill to default on 38 Studios debt

Rhode Island lawmakers this week proposed a bill to allow the state to default on the debt of its failed investment in game developer 38 Studios, the Associated Press reports.

The Rhode Island Commerce Corp. (formerly known as the Economic Development Corporation), whose responsibilities include providing new and existing businesses with the resources they need to grow, gave 38 Studios a $75 million loan guarantee in 2010 to relocate from Massachusetts to Rhode Island. 38 Studios promised to bring 450 jobs to the state by the end of 2012. The business took a turn for the worse in early...

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RI legislature approves bill for 38 Studios settlements

The Rhode Island Senate unanimously approved legislation this week that encourages out-of-court settlements in the 38 Studios lawsuit, the Associated Press reports.

Governor Lincoln Chafee's office submitted legislation earlier this month to encourage settlements against former Red Sox pitcher Curt Schilling's bankrupt 38 Studios. The state filed suit in late 2012 against executives at the developer and members of the former Rhode Island Economic Corp. (now known as the Rhode Island Commerce Corp.) over the $75 million loan guarantee overseen by the Corp. and provided by the state in 2010.

...

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R.I. Senate to vote this week on 38 Studios settlement bill

The Rhode Island Senate is expected to vote tomorrow on a bill whose supporters say will encourage out-of-court settlements in ongoing litigation regarding the failure of Curt Schilling's 38 Studios, reports NBC 10.

A committee in the Rhode Island House of Representatives reviewed the bill yesterday, and passed it on to the state Senate without voting. According to a lawyer for the Rhode Island Commerce Corp. — which sued 38 Studios founder Curt Schilling and 13 others after the company went bankrupt in 2012 — the legislation would make it more likely for the defendants to settle with the...

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38 Studios' recoverable resources are 'being eaten up,' lawyer says

The lead attorney for the Rhode Island Commerce Corp., Max Wistow, says that 38 Studios' recoverable resources are "being eaten up very rapidly" and is encouraging lawsuit settlement, The Associated Press reports.

Wistow also told a state Senate committee this week that defendants' insurance policies could pay costs outside of the policy limits. His sense of urgency seems to indicate a belief that the longer it takes to resolve a lawsuit or settlement, the less will be recovered.

The Providence Journal reports that Wistow pointed to precedents that he believes helped settle prior...

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38 Studios discussions continue encouraging out-of-court settlements

Rhode Island Commerce Corp. lawyer Max Wistow said he has been a part of "general discussions" regarding settlements in the 38 Studios case and is encouraging the R.I. General Assembly to pass a bill pushing for resolutions out-of-court, reports Boston.com.

The Commerce Corp, previously called the Economic Development Corp, is suing former Red Sox pitcher and studio founder Curt Schilling over its failed investment in 38 Studios. Other defendants include officials at 38 Studios, former EDC deputy director Michael Saul and executive director Keith Stokes, two law firms working with EDC at...

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Chafee administration submits legislation to end 38 Studios lawsuit

The administration of Governor Lincoln Chafee submitted legislation to the Rhode Island General Assembly yesterday encouraging settlement of the ongoing lawsuit against now-defunct developer 38 Studios' founder Curt Schilling and others involved in the company.

According to The Providence Journal, the proposal addresses R.I. General Laws Chapter 42-64-40, which deals with "court-approved settlements." It states that "a person, corporation, or other entity who has resolved its liability to the Rhode Island Commerce Corporation in a judicially approved good faith settlement is not liable for...

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SEC serves subpoena related to 38 Studios lawsuit

The U.S. Securities and Exchange Commission subpoenaed the Rhode Island Commerce Corporation in December for information related to its $75 million loan guarantee to 38 Studios, The Providence Journal reports.

A pair of attorneys confirmed the subpoenas, which requested "depositions and exhibits related to the state's lawsuit against former ballplayer Curt Schilling," according to the publication. Shechtman Halperin Savage's Thomas E. Carlotto, general counsel for the RICC, said that the December subpoena was sent directly to Cohen & Gresser, a law firm that the Rhode Island Commerce...

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RI governor lashes out, calls 38 Studios' Project Copernicus 'a lot of junk'

Rhode Island Governor Lincoln Chafee called Project Copernicus, the massively multiplayer RPG that was in development by Curt Schilling's company when it went under, "a lot of junk," the Daily Journal reports.

Speaking as a guest on a public affairs show on WJAR-TV, Chafee referred to Rhode Island's investment into the development company as "insane" and a "historically bad" decision possibly due to panic caused by the state's economy collapsing.

"People just panicked and gave a retired baseball player a huge amount of taxpayer money with no experience in this industry or any other...

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Here's what was sold at the 38 Studios asset auction

The 38 Studios auction this week at Heritage Global Partners garnered $320,000 in gross proceeds, according to a statement from court-appointed Receiver Richard J. Land.

Assets for the Rise of Legends and Rise of Nations games and their associated intellectual property were sold, as was the trademark for Big Huge Games. Polygon reached out to obtain information about who purchased the assets and their individual purchase prices, but that information has not been released.

According to Lund, he did not receive "acceptable offers" for Project Copernicus, 38 Studio's massively multiplayer...

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R.I. received no bids to explore defaulting on 38 Studios debt

Earlier this year, Rhode Island lawmakers budgeted $50,000 to study what might happen if the state defaulted on its $75 million loan guarantee to former Red Sox pitcher Curt Schilling's bankrupt 38 Studios.

The state sent proposals to 30 firms and advertised in publications like the Wall Street Journal. The deadline for bidders was Oct. 25. There were, according to the Providence Journal, no bidders.

In the wake of that revelation, former securities lawyer and investment banker Edward "Ted" Siedle said he and his firm, Benchmark Financial Services, would be interested in conducting the...

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Unreleased 38 Studios game discovered, auction set for Dec. 11

The auction to sell the remaining assets from former Red Sox pitcher Curt Schilling's defunct 38 Studios and Big Huge Games will take place Dec. 11 and include a recently unearthed game.

HGP executive vice president Nick Jimenez revealed in a recent press release that, within the last week, the firm discovered a "completed, but unreleased game" for Mac called Rise of Nations: Tactics by examining information on 38 Studios' servers.

Interested bidders have until Dec. 4 to submit their initial bids on items that include the intellectual property rights to the Amalur fantasy universe, Rise...

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38 Studios lawsuit depositions began this week

Depositions in the state of Rhode Island's lawsuit against ex-Red Sox pitcher Curt Chilling's 38 Studios began this week, the Associated Press reports.

Max Wistow, the lead attorney for the Rhode Island Economic Development Corporation, said the first deposition began Thursday with an executive at First Southwest, one of the companies that oversaw and advised the parties in the deal between the EDC and 38 Studios. According to Wistow, former EDC Executive Director Keith Stokes and Deputy Director Michael Saul are scheduled to be deposed in November.

Rhode Island filed suit in November...

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Curt Schilling holding estate sale at his Mass. home

Founder of now-defunct developer 38 Studios and former Red Sox pitcher Curt Schilling is holding an estate sale at his Massachusetts home later this week, according to a listing on Consign Works.

The sale will take place this Saturday, Oct. 12 from 8 a.m. to 4 p.m. ET at Schilling's "gorgeous 7 bedroom 8000 square foot home." While the famous bloody sock will not be included in the sale, the item listing includes a baby grand piano, a drafting table from 38 Studios and a bathrobe bearing Schilling's Red Sox number 38.

Schilling's home itself is also up for sale. The house, which boasts 7...

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RI governor forced 38 Studios bankruptcy, former official says

The former director of the organization that granted a $75 million loan guarantee to 38 Studios alleges that Rhode Island Governor Lincoln Chafee rebuffed attempts to fix the financial situation and effectively forced the studio's bankruptcy, the Boston Globe reports.

Keith Stokes, former director of the Rhode Island Economic Development Corporation (EDC), alleges in court documents that Chafee blocked the now-bankrupt developer's efforts to restructure debt and raise money in late 2011 and early 2012. 38 Studios declared bankruptcy in June 2012.

The state of Rhode Island filed suit...

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38 Studios' liquidation auction set for Nov. 14-15

An auction in which 38 Studios' assets, including intellectual property for Kingdoms of Amalur, will be held Nov. 14-15, according to a listing on Heritage Global Partners' website.

Assets up for sale include those for Project Copernicus, the massively multiplayer online role-playing game that never shipped, sequel rights to the only game that 38 studios ever shipped, Kingdoms of Amalur: Reckoning, as well as Reckoning's merchandising rights. IP rights to former Red Sox pitcher and studio founder Curt Schilling's Big Huge Games are also up for grabs and include the strategy games Rise of...

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38 Studios' $75 million loan from Rhode Island investigated by SEC

The U.S. Securities and Exchange Commission investigated the $75 million loan guarantee that the Rhode Island Economic Development Corporation provided to Curt Schilling's now-bankrupt 38 Studios, WPRI reports.

Documents obtained by WPRI indicate that the EDC responded to requests from the SEC over a five-month period last fall and winter. EDC spokeswoman Melissa Czerwein later confirmed that the organization hired lawyers from Cohen & Gresser "based on their expertise in relation to an inquiry from the SEC."

According to Cohen & Gresser's website, the firm has "represented clients in...

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Judge's ruling allows Rhode Island suit against 38 Studios to proceed

Rhode Island's lawsuit against Curt Schilling and others involved with a $75 million loan guarantee to bankrupt developer 38 Studios can proceed, according to a ruling from Superior Court Judge Michael Silverstein.

"I am gratified by the Court's initial ruling in the 38 Studios case," Rhode Island Governor Lincoln Chafee said in a statement provided to Polygon. "It allows the important claims to proceed and is a significant first step to recovering the taxpayers' losses."

In 2010, the Rhode Island Economic Development corporation backed a $75 million loan guarantee that was designed to...

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Curt Schilling: 38 Studios' failure was the 'most devastating thing'

The financial failings and eventual bankruptcy of Curt Schilling's game company, 38 Studios, is "the most devastating thing" the former baseball pitcher has ever experienced, according to a recent profile from The Boston Globe.

The studio declared bankruptcy in 2012, just before it laid off its entire staff. It would eventually default on a loan to the state of Rhode Island and leave behind debt totaling more than $100 million. Schilling said that it's still something he's "trying to bounce back from."

"It was so hard, because I had pushed and pushed and pushed," Schilling said. "I had...

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RI official discussed private funding for 38 Studios

A member of the Rhode Island Economic Development Corporation discussed obtaining private funding for 38 Studios after the state approved a $75 million loan guarantee, the Associated Press reports.

Former EDC deputy director J. Michael Saul's emails were released this week as part of an investigation of the state's investment into the bankrupt studio. One of Saul's emails was written a day after the $75 million loan guarantee was approved. An email to a Bank of America executive revealed that another financial institution was considering an additional $25 million loan for the developer.

"...

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Rhode Island 2014 budget signed, includes payments on 38 Studios debt

Rhode Island's 2014 budget, which includes plans to repay the hefty debt left behind by now-defunct game developer 38 Studios, was signed today alongside a statement from Governor Lincoln D. Chafee regarding the state's debt settlement.

According to Chafee, the state's decision to honor the bond repayments was made to avoid "severe consequences" for the state. Chafee's response comes in response to the Rhode Island General Assembly's decision to make the first scheduled payment on 38 Studios' debt of approximately $112.6 million, which includes the initial $75 million loan and $37.6...

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Rhode Island House to begin public hearings on whether state should pay $113M 38 Studios debt

The Rhode Island House of Representatives is set to begin public hearings to debate whether the state should make good on its obligations to defunct video game developer 38 Studios, reports the Providence Journal.

A panel from Rhode Island's House Oversight Committee requested documents related to the company more than a month ago, and received thousands of pages of material this week. Now, says committee chairman Michael J. Marcello, the panel is ready to move forward with the discussion.

"The perception out there is that we haven't been doing anything," said Marcello during a meeting...

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Rhode Island governor looking into ramifications of not paying 38 Studios debt

Rhode Island governor Lincoln Chafee is looking into the ramifications of not paying back money owed to lenders following the collapse of Kingdoms of Amalur: Reckoning developer 38 Studios, the Providence Journal reports.

According to spokeswoman Christine Hunsinger, the state has been collecting data for a number of months; however, the administration has no plans to follow through on this decision. Data gathering is currently being done "to understand the ramifications of what that decision would be," said Hunsinger.

Rhode Island owes a total of $112.6 million $75 million for the...

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38 Studios preparing to sell Kingdoms of Amalur to help pay off debt

Curt Schilling's ill-fated game developer 38 Studios is ready to sell its sole title, Kingdoms of Amalur: Reckoning, and associated assets to an unnamed party in an effort to pay off its $130 million debt, The Providence Journal reports.

The statement comes from Providence lawyer Richard J. Land, who did not identify the parties interested in the sale.

"Who knows what the value ultimately will be," Land said. "But there is interest in the assets."

Court hearings begin on Wednesday.

38 Studios declared bankruptcy in June 2012 after missing several payments to the state. Shortly after,...

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38 Studios loan wasn't 'micromanaged' because state faced other problems, says governor

Rhode Island Governor Lincoln Chafee was "reluctant to micromanage" the state's investment in now-defunct developer 38 Studios, saying the state had its hands full with other problems at the time, according to a recent New York Times feature.

The state's main reason for pushing ahead with funding for former Red Sox pitcher Curt Schilling's studio was to create more jobs. The deal between Schilling and the state started in 2010 under then-governor Don Carcieri, and was already underway when Chafee took office.

"They were telling us we could have unemployment of 13 or 14 percent!"...

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Rhode Island considering defaulting on 38 Studios debt

Rhode Island legislators are considering a proposal that would have the state default on the debt it owes as a result of 38 Studios' collapse last spring, AP reports.

The Rhode Island Economic Development Corporation gave 38 Studios a $75 million loan in 2010 in an agreement under which the game developer would create 450 jobs over the subsequent three years. But the studio failed to make its first payment on the loan last May, and during the next month laid off its entire staff before declaring bankruptcy.

That left the state of Rhode Island on the hook for approximately $100 million,...

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38 Studios' Curt Schilling asks judge to dismiss lawsuit over $75 million loan

On Friday, former Red Sox pitcher and 38 Studios founder Curt Schilling's attorneys asked a Rhode Island judge to dismiss the lawsuit filed against him and other former 38 Studios executives, according to a report from the Associated Press.

According to the AP, attorneys representing the bankrupt 38 Studios filed a request with Superior Court Judge Michael Silverstein to throw out the state's lawsuit. Attorneys reportedly argued that 38 Studios executives disclosed its financial needs to the Rhode Island Economic Development Corp. and did not defraud the state agency.

Rhode Island and the...

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Curt Schilling's 38 Studios sued by Rhode Island over $75 million loan guarantee

The state of Rhode Island is suing Curt Schilling's bankrupt game development studio over the $75 million loan guarantee provided by the state, Gov. Lincoln Chafee said in a public statement. The 96-page complaint against the defunct game developer and its advisors alleges fraud, negligence and civil conspiracy over the state-backed funding of 38 Studios' relocation to Rhode Island and the development of MMO Copernicus.

Kingdoms of Amalur: Reckoning developer 38 Studios, founded by Schilling in 2006, shut down in May after failing to make loan payments and employee payroll.

"When it...

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Rhode Island governor considering overhaul of agency that provided 38 Studios' loan

Rhode Island Governor Lincoln Chafee may restructure the government agency that provided the backing for 38 Studios' office in the state, according to a statement from the governor, reports Reuters.

Chafee's office recently commissioned a report on the Rhode Island Economic Development Corporation (RIEDC), which provided the original $75 million loan to Curt Schilling's 38 Studios in 2010. The internal study was performed by the Rhode Island Public Expenditure Council, an independent nonprofit research firm, and was published on Tuesday. It suggests that the RIEDC be revamped and that a...

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Rhode Island lawmakers face political blowback from 38 Studios bankruptcy

The $75 million loan guarantee granted to Curt Schilling and the now bankrupt 38 Studios could have an effect on the upcoming Rhode Island elections, according to the Associated Press. Lawmakers are facing heavy questions about the investment.

The loan guarantee was given to 38 Studios by Rhode Island's Economic Development Corporation. Although the EDC now operates under a new policy that caps a loan at $10 million, it went into effect only last year after Gov. Lincoln Chaffee took office. The original legislation, which passed in 2010, reached up to amounts of $125 million in loans....

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Beautiful environments from 38 Studios' 'Project Copernicus' revealed

The game world environments from the massively multiplayer online game 38 Studios was working on before it closed were revealed in two YouTube videos posted by a former 38 Studios employee this week.

The videos, which were posted by 38 Studios' former senior environment artist, show the stunning environments from Project Copernicus, the codename for a MMO that was to take place in the fictional realm of Amalur.

The first video shows the city of Jottunhessen and its environments after the game was optimized and polished and the developers "fine-tuned [the] occlusion and lighting to meet the...

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38 Studios' 'Copernicus' would have been free-to-play

Copernicus, the half-finished project by now defunct 38 Studios', would have been a free-to-play massively multiplayer online title, company founder Curt Schilling told Boston magazine in recent interview.

"We were going to be the first triple-A, hundred-million-dollar-plus, free-to-play, micro-transaction-based MMO. That was one of our big secrets," Schilling told Boston. "I think when we eventually showed off the game for the first time, the atom bomb was going to be free-to-play. When we announced that at the end, that was gonna be the thing that, I think, shocked the world."

Schilling,...

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38 Studios burned through $133 million before bankruptcy

Kingdoms of Amalur: Reckoning developer 38 Studios was "hemorrhaging cash" at a time when the studio was not bringing in any revenue, according to a former executive director of the Rhode Island Economic Development Corporation.

In documents obtained by the WPRI, the studio spent $133 million before it went into bankruptcy last month. The former executive director of the R.I. Economic Development Corporation, Saul Kaplan, said 38 Studios was spending big with taxpayer money.

"The thing that is most amazing to me is their burn rate was about $5 million a month all through 2011, heading into...

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Boston Magazine chronicles 38 Studios' demise building a game that 'wasn't fun'

In an article in Boston Magazine, Curt Schilling, founder of 38 Studios, and his former employees tell the inside story of the events that precipitated the bankrupt studio's recent collapse after spending six years designing an MMO that "wasn't fun."

Schilling aspired to amass enough wealth to fund a $200 million center for autism, in honor of his autistic son. Schilling was worth $90 million when he retired from baseball, and he believed that 38 Studios would create the additional wealth required.

His initial expectation was that it would take four years and $50 million, including a $5...

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Trustee for 38 Studios bankruptcy seeks help to sort out remaining assets

Jeoffrey Burtch, the trustee in the 38 Studios federal bankruptcy case, wants to hire a law firm that specializes in intellectual property and media law, according to the Providence Journal.

Burtch is seeking the law firm Cozen O'Connor's help to sort out what remains of 38 Studios, and how the remaining assets may be used to settle the bankrupt studio's outstanding debt.

In bankruptcy court on Tuesday, Richard Wester, chief financial officer for 38 Studios, revealed that the company would have remained solvent had it sold 2 million copies of Kingdoms of Amalur: Reckoning. The revenue...

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38 Studios founder Curt Schilling sued by bank for $2.4 million

One of 38 Studios' creditors is trying to recover some of the money it loaned to the bankrupt studio by suing its founder, Curt Schilling.

Citizens Bank filed suit in Massachusetts Superior Court last week – the same day 38 Studios filed for bankruptcy – seeking repayment of $2.4 million from Schilling. According to the suit, Schilling personally guaranteed a $2 million line of credit and a $350,000 credit cart account with the bank which has not been paid.

"Schilling is liable to the Bank in the total amount of $2,394,240.40" plus fees, interest and attorney costs, according to Citizens'...

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Subpoenas sent out to 38 Studios

Rhode Island State Police, FBI and U.S. attorney's office in Providence have subpoenaed documents from Curt Schilling's 38 Studios after the company filed for bankruptcy last week.

The Bank of Rhode Island, which loaned 38 Studios $8.5 million earlier in the year when it encountered financial trouble, confirmed to the Providence Journal that it received a subpoena for 38 Studios' records. The Rhode Island Economic Development Corporation, which lured 38 Studios to Providence in 2010 with the promise of a guaranteed $75 million loan, also confirmed that it received a subpoena requesting...

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'38 Studios spouse' says company knew about cancelled insurance

38 Studios did not pay health insurance for several months and was aware of its cancellation without informing employees, an unnamed wife of a former company employee wrote in a letter published on Gamasutra today.

The 38 Studios employee learned of insurance termination on May 22, when the pregnant wife of another employee was informed by her doctor that it would run out at midnight on May 24. "When confronted, 38 Studios admitted they had been aware since the 21st of May that due to lack of payment for several months," writes the "38 Studios spouse." "Again, they knew the problem existed...

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Rhode Island values 38 Studios assets in 'tens of millions,' investors interested

Rhode Island officials have valued the state's acquired assets from the recently bankrupted 38 Studios in the "tens of millions" of dollars, state counsel announced during a press conference today.

John Savage, a partner at the firm that's serving as counsel to the Rhode Island Economic Development Committee, was not more specific than that when asked about the assets' worth.

"We've had, in recent days, discussions with investors that were and, to my knowledge, are discussing substantial numbers, which indicate that there could be significant value to the assets," Savage said. "The...

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38 Studios declares bankruptcy

This morning, Curt Schilling's 38 Studios filed for bankruptcy after a long struggle that included missed payments and a complete layoff of all employees.

Rhode Island police told the Providence Journal that they would be joined by the attorney general's office, the U.S. Attorney's office and the FBI in launching a formal investigation into Schilling's video game company.

In a statement to the Journal, 38 Studios said, "This action comes after several weeks when the company has reviewed, considered and received the recommendations and advice with respect to potential avenues for relief that...

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'Epic Baltimore' rises out of the ashes of Big Huge Games

Many of the roughly 80 employees of Big Huge Games who found themselves suddenly out of work when Curt Schilling's 38 Studios imploded in May will be starting new jobs soon as employees of Epic Games, Epic confirmed to Polygon today.

In a letter sent to employees today, Epic Games president Michael Capps said that the former Big Huge Games leadership team contacted them on Wednesday.

"They wanted to start a new company and keep together some of the key talent displaced by the layoff, and hoped that they could use an Epic IP as a starting point for a new game," he wrote in the letter, which...

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New 'Project Copernicus' screenshots released by Curt Schilling

Six new screenshots of the troubled massively multiplayer game Project Copernicus were released last night by 38 Studios' Curt Schilling showing additional areas of the Copernicus world and details of what the studio planned for the long in-development title.

The photos, posted to Schilling's Facebook page, present a number of kingdoms the development team was working on, a shanty town-style hub and the remains of a giant Balor monster.

"The entire world, everywhere you saw, every point you could see, as far as the eye could see, you could go," writes Schilling in an image subtitle.

While...

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'Kingdoms of Amalur: Reckoning 2' was in pre-production before staff was let go

The sequel to Kingdoms of Amalur: Reckoning was in pre-production when staff at Big Huge Games were let go last week, according to a Joystiq story.

Sources close to the deal told Polygon that the studio was in advance talks with a publisher prior to the legal drama that would lead to the loss of the team. Those talks fell through once employees were let go, we were told. Full coverage of 38 Studio's legal troubles can be viewed here.

The intellectual property, tech and code for Amalur is currently owned by 38 Studios but may soon be taken by the state of Rhode Island, making it unlikely...

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No new 'Kingdoms of Amalur' patch barring 'some sort of miracle'

Kingdoms of Amalur will not receive any new patches "barring some sort of miracle," developer Big Huge Games announced on the game's forum.

In a post titled "Thanks, Apologies, and Farewell!" lead designer Ian S. Frazier stated the studio received clearance to begin development on a PC-only patch, with plans to include two additional difficulty modes, camera features and bug fixes. However, this would not see the light of day as "before we finished, the studio collapsed."

"I wanted to apologize for the lack of a patch for Reckoning," he wrote. "It's something we very much wanted to do, but...

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38 Studios: 'We thought the governor was an ally'

The former creative director of 38 Studios, Steve Danuser, told NECN that the Rhode Island governor Lincoln Chafee turned his back on the studio in their time of need.

"We just needed a little more help, and we thought the state would have our backs on that," he told the television station.

"We thought the governor was an ally. It didn't turn out that way."

Danuser was the creative lead on 38 Studio's role-playing game, Kingdoms of Amalur: Reckoning. He along with all of 38 Studios staff are now unemployed after a studio-wide lay-off that took place last week.

"The governor has turned his...

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38 Studios passes second mortgages onto some former employees

Some of the hundreds of 38 Studios employees laid off yesterday were hit with a second round of bad news this week when they were told that homes they thought the company had sold for them hadn't been, and that they may be stuck with a second mortgage, Polygon has learned.

Several sources directly impacted by the mortgage issue confirmed the news today and a 38 Studios official, who asked to not be named, said the company is working to try and get to the bottom of the notifications and find a resolution.

One former employee said they discovered this week that their Massachusetts home, which...

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Studios reach out to former 38 Studios staff, list of vacancies created

In the wake of 38 Studios letting go all of its staff, development studios in the Providence region and beyond have reached out to those affected by the layoffs to advertise vacant positions.

An overwhelming number of developers from the US and Canada took to Twitter earlier today to advertise and extend job offers to former 38 Studios staff.

Games and technology writer Alex Rubens compiled an extensive list of studios with vacant game development positions, which can be viewed here.

Among the gaming and tech companies in Rhode Island extending job offers to former 38 Studios staff include:

...

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38 Studios lays off entire staff

Curt Schilling's 38 Studios laid off all of their employees today, shutting down both their Rhode Island office and Maryland-based subsidiary Big Huge Games, a source familiar with the company tells Polygon.

The news came as a surprise to nearly everyone involved, including the state of Rhode Island and Governor Lincoln Chafee who during an afternoon press conference said that as of this morning they hadn't heard a word about possible layoffs or a closure.

During the evening press conference Chafee attributed the sudden studio closure and financial plummet to the studio's fist game, K...

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Image leaks could be from 'Project Copernicus'

Images from what appears to be 38 Studios' Project Copernicus have been leaked to 38Watch, a Kingdoms of Amalur online community.

Posting in a thread entitled "You guys deserve this", a forum member who only joined in May posted screenshots featuring characters from what is believed to be 38 Studios' upcoming video game. One of the screenshots carries the official 38 Studios logo.

The forum poster who goes by the nickname "Alyn" wrote: "38 isn't dead yet. Amalur is worth fighting for. Spread the fire."

We have reached out to 38 Studios to confirm whether the screenshots are legitimate.

The...

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38 Studios may miss out on tax credits

The studio behind Kingdoms of Amalur: Reckoning may miss out on millions of dollars in state tax credits because it wasn't incorporated in Rhode Island.

Rhode Island's tax credit law explicitly states that productions are only eligible to receive tax credits if the business is "formed under the laws of the state of Rhode Island". While 38 Studios registered as a business in Rhode Island in September 2010, it was organized under Delaware law and its Rhode Island registration was as an out-of-state LLC.

A spokesperson for Rhode Island governor Lincoln Chafee said that the state is aware that...

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38 Studios CEO and senior VP leave company amidst layoffs

Kingdoms of Amalur developer 38 Studios is lighter at least two high level employees today, as CEO Jen MacLean and senior VP of product development John Blakely have left the struggling company.

The two execs indicated earlier today that they were no longer with 38 Studios via their respective LinkedIn profiles, a change spotted by WPRI. A person familiar with the situation tells Polygon that the profiles are indeed accurate and that the pair are no longer with the studio.

MacLean's profile indicates that she left 38 Studios officially as of March. She was reportedly on indefinite maternity...

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Rhode Island governor confirms layoffs at 38 Studios

The Governor of Rhode Island confirmed that staff layoffs have occurred at 38 Studios in the wake of the studio's struggle to repay its debt to the Rhode Island EDC.

Speaking to the media after a three hour closed door meeting with Rhode Island's EDC today, Governor Chafee revealed that the meeting concerned the company's payroll and staff layoffs.

"I believe it was a mix of who's made payroll and a number of layoffs," he said, without going into detail about how many layoffs were made and in which departments.

"I know that the tax payers want answers, and they'll get them overtime. All I...

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'Project Copernicus' video revealed in midst of financial turmoil

38 Studios' long-in-development massively multiplayer online game got two outings today in the midst of legal wranglings between the state of Rhode Island and the company behind Kingdoms of Amalur: Reckoning.

Codenamed "Project Copernicus," little was known about the massive online game other than that it would take place within the fictional realm of Amalur.

But that changed this afternoon when Rhode Island Gov. Lincoln Chafee told a press gathering that the game is expected to be released in June 2013. Later in the afternoon a video for the game hit YouTube.

A 38 Studios spokesman...

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38 Studios makes late payment to state

The developers of Kingdoms of Amalur: Reckoning made good on a payment to the state of Rhode Island today, Governor Lincoln Chafee told a gathering of press this afternoon.

The $1.125 million check was handed into the state and the check has cleared, Chafee said.

A missed loan payment to the state of Rhode Island by Kingdoms of Amalur: Reckoning developer 38 Studios kicked off the chain of events that cast light on a studio seemingly struggling to stay afloat.

The studio defaulted on the loan payment to the Rhode Island Economic Development Corporation on May 1. During a meeting with the...

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Rhode Island's Reckoning: A quick history of 38 Studios and their deal with Rhode Island

Kingdoms of Amalur: Reckoning could become the first video game in history to cost a state tens of million of dollars.

Years after bringing together a dream team of developers, artists and writers to create a fantasy fiction that was meant to be home to countless video games and help power a billion dollar company, 38 Studios seems poised to collapse under the weight of debt and government scrutiny.

On Monday, the board of directors for the state-funded Rhode Island Economic Development Corporation plans to hold a public meeting to discuss what to do about the studio they backed for a $75...

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

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...

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Kingdoms of Amalur developer asks state for bailout

38 Studios founder Curt Schilling went before state officials today, baseball hat in hand, to ask for additional help from Rhode Island's Economic Development Corporation after the developer defaulted on a promised payment earlier this month.

The studio behind action RPG Kingdoms of Amalur: Reckoning and an upcoming massively multiplayer online game dubbed Project Copernicus failed to make a $1.125 million payment to the state on May 1. That "annual guarantee fee" is part of an agreement tied to a $75 million loan guarantee from the state and is calculated yearly as 1.5% of the "average...

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38 Studios defaulted on loan payment

Kingdoms of Amalur: Reckoning developer 38 Studios defaulted on a $1.125 million loan payment to the Rhode Island Economic Development Corporation (EDC), according to reports from WPRI.

In 2010, the Rhode Island EDC gave 38 Studios a $75 million taxpayer-backed loan to lure the studio from Massachusetts to Rhode Island. Under the terms of the loan, 38 Studios agreed to pay the EDC an "Annual Guaranty Fee" of 1.5% of the loan ($1.125 million) on May 1 of each year. Reports state that the studio received $49.8 million in cash from the loan but defaulted on May 1 when it failed to make the...

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'Kingdoms of Amalur: Reckoning' developer could be in financial trouble

The studio behind Kingdoms of Amalur: Reckoning may be in financial trouble, reportedly meeting with state officials to discuss its financial future.

Rhode Island Governor Lincoln Chafee told NBC 10 that state officials have been meeting with 38 Studios' owner and former Red Sox pitcher, Curt Schilling to work on "different issues".

"We're always working to keep Rhode Island companies solvent, and that's what we're doing with 38 studios," Chafee said.

"We're working with 38 Studios on different issues. That's all I can report now."

38 Studios was founded in Massachusetts but moved to Rhode...

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