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38 Studios Bankruptcy Hearings Begin

| 10 Jul 2012 20:52
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Former executives at the Kingdoms of Amalur developer face hard questions about the demise of the company.

The wheels of liquidation have begun to turn at the now-defunct 38 Studios, the developer of Kingdoms of Amalur: Reckoning and the unreleased MMO now known simply as Kingdoms of Amalur, and that means that the ugly business of figuring out what went wrong will now get underway in earnest. A big part of that process is allowing creditors to question company executives about matters that would normally not be aired in public, and which the executives are compelled to answer.

"It's a free for all," said Boston bankruptcy attorney David J. Reier. "Everything has to be out in the open. There are no more secrets."

The opportunity to fire off some cathartically-pointed questions may be as good as it gets for most creditors, who will probably be left financially high and dry by the bankruptcy. The same goes for former employees who are owed back pay that they will almost certainly never see. 38 Studios estimates that it owes over $150 million, including $116 million to Rhode Island for the loans that attracted it to the state in the first place, and has less than $22 million in assets. Most of that will go to Rhode Island.

A few days prior to the hearing, 38 Studios founder Curt Schilling defended his company's conduct and once again pointed the finger at the Rhode Island Economic Development Corporation, which he said "was trying to bully us and intimidate us on multiple fronts." His wife was even more pointed in her comments on Facebook, writing, "[Rhode Island Governor Lincoln] Chafee and his office making sure everyone knows or thinks 38 Studios is in financial trouble... So know [sic] Rhode Island tax payers everyone is quick to write that you will be fitting [sic] the bill for this one. You know what I think you got. A 110 million dollar 'I told you so' from your beloved Governor Chaffee."

Schilling himself is quite possibly the biggest single loser in the 38 Studios meltdown; in June he said that he'd sunk more than $50 million of his personal fortune into the company and that the money he'd made as a star baseball player was "probably all gone."

Source: Boston Globe

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