38 Studios is being sued by Rhode Island

Thursday, 1 November 2012 18:38 GMT By Jeff Dunn

Lawyers for the Rhode Island Economic Development Corporation are suing the architects of the $75 million taxpayer-guaranteed loan granted to bankrupt Kingdoms of Amalur dev 38 Studios in 2010.

As WPRI reports, the R.I. EDC is the semi-public agency that granted the loan to the development studio in the first place.

Defendants in the matter include ex-Major League Baseball star and former studio founder Curt Schilling, former CEO Jennifer MacLean, former EDC executive Keith Stokes, who was fired in May, and many others who were part of securing the original deal, including various banks and law firms.

If you have some free time on your hands, you can read the massive complaint here. If not, it essentially says that the EDC board that initially approved the loan did not conduct a thorough enough assessment of 38 Studios and its ability to complete the projects it set out to finish. That includes Project Copernicus, the MMO that ended up being shelved along with the company.

Furthermore, it claims that Wells Fargo, one of the aforementioned defendants, made almost $500,000 “in hidden commission” from 38 studios, meaning that the EDC board was never made aware of the transaction.

“When it became clear that the company would not survive, I publicly stated my commitment to you that my primary goal would be to do everything within my power to protect the taxpayers of Rhode Island,” said Governor Lincoln Chafee in a statement posted to YouTube about the lawsuit, which you can see in full below. “I will work to minimize any loss of your hard earned taxpayer dollars.”

“My message to Rhode Islanders is this: I know that 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. You have my commitment that I will continue fighting to protect the interest of all Rhode Islanders every day that I am Governor.”