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Lawyer Claims 38 Studios Masked Financial Shortfall

| 5 Apr 2013 18:00
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Court filings claim that executives at 38 Studios knew it didn't have the money to finish Kingdoms of Amalur Online before it even moved to Rhode Island.

Post-catastrophe fault-finding often concentrates on trying to figure out who knew what and when they knew it, because proceeding down a path to ruins in good faith is completely different from charging ahead knowing full well that disaster awaits. That's why the effort to determine exactly what led to the collapse of Curt Schilling's 38 Studios is so important: Is it just another unfortunate example of a business that couldn't make a go of it, or was it high-level malfeasance that left the state of Rhode Island on the hook for 100 million smackers?

"Malfeasance!" cried Rhode Island attorney Max Wistow - figurately, of course. Documents filed on behalf of the state earlier this week claim that 38 Studios actually needed more than the $75 million in loan guarantees that Rhode Island used to bring the studio to the state, and that it was aware the funds it would receive from the state would be insufficient even before it moved to Rhode Island. Wistow claimed the shortfall was "actively masked."

In March, lawyers for Schilling and other former 38 Studios executives sought to have the lawsuit dismissed, claiming that the company's financial needs had been "repeatedly disclosed" to the Rhode Island Economic Development Corporation and that the EDC was well aware that the total cost of making Kingdoms of Amalur Online would exceed $125 million. On April 1, however, Wistow said the suit should be allowed to proceed, claiming that there is "crushing evidence" that Schilling and other former executives concealed the true state of the company's finances.

Source: Providence Journal

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