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Rhode Island suit against 38 Studios head Schilling can proceed

Rhode Island suit against 38 Studios head Schilling can proceed

Wed 28 Aug 2013 11:31pm GMT / 7:31pm EDT / 4:31pm PDT
Legal

Judge rules state can sue founder, other execs for fraud, negligence, racketeering, and other charges

A judge has ruled that the state of Rhode Island's lawsuit against 38 Studios founder Curt Schilling and others can go forward, according to an AP report. The suit was filed against Schilling and 13 others last year after 38 Studios went under, leaving the state on the hook for $75 million in loan guarantees it had given to entice the developer to relocate from Massachusetts.

The state is going after Schilling and a group including other former 38 Studios executives as well as ex-officials with the state's Economic Development Corporation involved in approving the loan guarantees. The charges include fraud, negligence, breach of fiduciary duty, racketeering, conspiracy, and more. The state believes that all of the defendants knew or should have known that 38 Studios would not be able to survive, even with the loan money, and that the accused concealed the true state of the company's finances when the deal was made.

38 Studios shut down in May of 2012, months after shipping its first project, Kingdoms of Amalur: Reckoning. Its other major project, an MMO known as Project Copernicus, was never released.

4 Comments

Paul Jace Merchandiser

942 1,428 1.5
Racketeering? Really?

Posted:A year ago

#1

Andrew Goodchild Studying development, Train2Game

1,254 421 0.3
I think it was more a case of naivety, incompetence and arrogance on Shilling's part.

You know when a someone has made money in the city, but decides it would be a nice semi-retirement to move somewhere quiet and open a pub or restaurant with no experience working in one? They believe it can't possibly be as hard as what they did, then wonder why they are losing money even working 70 hour weeks? That is what the story made me think of, only on a lot larger scale.
He had 50 or 60 million of his own dollars, if he had started small then he could have made a foundation, learning the ropes whilst staying debt free. Instead he jumped straight in the deep end.

For Rhode Island, they leant a guy with no experience in the games industry, or big business in general, north of $100 million because he was a good sportsman? How did that ever backfire?

Posted:A year ago

#2

Tameem Antoniades Creative Director & Co-founder, Ninja Theory Ltd

196 164 0.8
Why throw even more money away on a court case that will, at best, work out which of each side is Dumb and Dumber

Posted:A year ago

#3

Greg Wilcox Creator, Destroy All Fanboys!

2,193 1,170 0.5
Oh, good gravy. As usual, the state is over-charging to an amazing degree (fraud, conspiracy and racketeering are big stretches, so I'm thinking these harsher charges will be dismissed if the defense does its job).

I think Schilling had a dream of making that game he's always wanted to play and got hooked in with folks who had the same dream and thought it would all work out perfectly. The game simply didn't review or sell as well as projected and even with new DLC post-launch, things went way south after that.

It's not a terrible game by any means and I think if anything, a playable build of KoA should be admitted as evidence that everyone had good intentions, but they were done in partly due to their own problems, partly to high expectations in an industry that demands targets at the cost of a studio if they're not met and party (maybe) due to too much pipe-dreaming without regard to real world consequences if the shit hit the fan...

Posted:A year ago

#4

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