The state of Rhode Island claims Kingdoms of Amalur developer 38 Studios deliberately misled its major creditor in securing a $50 million loan.
As reported by the Providence Journal, lawyers representing Rhode Island Economic Development Corp filed documents this week claiming 38 Studios knew it did not have enough money to operate successfully.
Rhode Island loaned 38 Studios $50 million as part of an initiative to bring more businesses into the state, but the company allegedly needed $75 million to operate over the specified time.
The state’s lawyers said 38 Studios deliberately hid the shortfall, knowing it did not have the cash to complete Kingdoms of Amalur: Reckoning.
The suit is targeted at founder Curt Schilling and 13 other defendants; Wells Fargo is among the parties believed complicit in pushing the loan arrangement through.
As history showed, 38 Studios really didn’t have the resources to survive, going bankrupt despite a reasonable reception to its first game. Whether Schilling and other accused parties were aware of the matter – or just let spending get away from them – is the $75 million question.
Schilling himself went broke in the company’s closure, and has had to sell his personal assets. He seemed hurt and confused that Rhode Island couldn’t extend a little more financial help to 38 Studios, and said the state’s hostility alienated potential investors.