Schilling poses with the Collector’s Edition of 38 Studios’ sole release, Kingdoms of Amalur.reader comments 29
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The long, winding saga of baseball star Curt Schilling’s massive business failure in the video game industry may finally be reaching its end.
As The Associated Press reports, Schilling and other former executives at 38 Studios have agreed to pay $2.5 million to the state of Rhode Island to settle outstanding claims of defrauding the state out of $75 million in loans.
The case dates back to 2012, shortly after 38 Studios laid off all of its 379 staffers and declared bankruptcy.
Though 38’s first game, Kingdoms of Amalur, sold a respectable 1.3 million copies in its first 90 days, the company’s financial resources were reportedly drained by work on an ambitious RPG project, codenamed Copernicus, which never saw the light of day (save for this teaser trailer released just before the company’s bankruptcy).
The Rhode Island government floated $75 million in bonds to provide loan guarantees that convinced 38 Studios to move from its base in Massachusetts.
After the bankruptcy, though, the Rhode Island Economic Development Corporation argued in its lawsuit that the company had used false financial projections and misleading statements to obscure the fact that the company was “destined to fail according to 38 Studios’ own financial projections.”
Now, the state is agreeing to just $2.5 million in settlement, saying that this is a “highly unusual case” in which it “makes no economic sense whatsoever” to continue going after the defendants.
That’s not too surprising, considering that Schilling previously said he was “tapped out” after 38 Studios’ failure, and 2012 bankruptcy filings showed the company with $150 million in debt and just $22 million in assets.
Still, it leaves Rhode Island taxpayers on the hook for $28.2 million worth of bonds after accounting for other settlements related to the case (most notably with the banks backing the bonds).
Schilling has consistently denied wrongdoing in the case, saying that he was expecting additional tax credits and an extension on his loan payments from the state to keep the company afloat.
An expected publishing deal for an Amalur sequel also fell through before it could help 38 Studios limp along for a bit longer.
Schilling says he lost his entire savings of $50 million in the debacle, though the state has disputed that claim.
All told, it’s an ignoble end to the story of a former baseball pitcher who retired only to chase his dream of video game development stardom.
And without 38 Studios to worry about, Schilling has had more time to spend doxing those who threaten his family online.