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Hearing on 38 Studios' potential lobbying violations set for next week
Rhode Island Secretary of State Ralph Mollis has issued letters to four individuals, requesting their presence in court on July 1 to determine if attempts were made to lobby lawmakers following the costly collapse of game developer 38 Studios. "Our office has been diligently investigating who, if anyone, lobbied lawmakers regarding 38 Studios," Mollis said in an official statement sent to local media outlet WPRI. "It is our goal to uncover any lobbying violations, which may have occurred without our knowledge, which is why our office has sent letters of inquiry to all parties who we feel may have been involved in lobbying activity, and may be in violation of lobbying laws." Those contacted by Mollis include 38 Studios founder Curt Schilling, former board member Thomas Zaccagnino, Keith Stokes, the former executive director of the Rhode Island Economic Development Corporation, and Michael Corso, an attorney who, WPRI claims, had "several lucrative contracts with the failed video game company." A letter obtained by WPRI, sent from Mollis to Corso, alleges that the attorney met with members of the Rhode Island General Assembly and other lawmakers on "numerous" occasions "for the purposes of influencing policy–making decisions or policy-making actions of the public corporation." Corso's lawyers, in turn, deny Mollis' claims, and demand more evidence of wrong-doing. [Image: 38 Studios]
38 Studios knew $75M loan wasn't enough to finish Project Copernicus
Emails surfacing from the legal fracas concerning 38 Studios and its loan from Rhode Island indicate that the studio knew the loan was not nearly enough to fully fund the game but decided to hide that from outsiders. 38 Studios Vice Chairman Thomas Zaccagnino allegedly sent one the damning emails, urging a few studio execs to remain mum on the financial situation: "I really do not think we should highlight the fact that we might be under-capitalized... [it] won't go over well with the staff or board." The email was in response to CEO Jen MacLean, who wrote that she was concerned that the state wasn't delivering the full $75 million from the agreement and that the project would fall short of funding because of this. One lawyer involved in both the deal and the lawsuit said that the state knew that the deal wasn't enough to fully fund: "The [EDC] Board was acutely aware that the capital needs of 38 Studios where [sic] in excess of $125MM as acknowledged in the 2010 EDC Inducement Resolution[.] The Board also knew that the net proceeds of the EDC Loan would be less than $75MM."
Rhode Island governor signs 38 Studios settlement bill into law
Earlier this week, the Rhode Island House of Representatives passed a bill to promote settlements in the ongoing litigation surrounding the collapse of 38 Studios, Curt Schilling's defunct game development studio. Rhode Island governor Lincoln Chafee has already signed the bill into law, which protects defendants who settle from lawsuits filed by co-defendants over damages for which that original defendant is found liable. A separate bill, introduced earlier this month, aims to allow the state of Rhode Island to default on the $75 million loan it provided 38 Studios - a debt the taxpayers of Rhode Island are currently on the hook for. Defaulting on the debt would allow Rhode Island to ignore a debt payment of $12.5 million due later this year. 38 Studios founder Curt Schilling recently shared news that he had been diagnosed with cancer. Schilling is 47 years old. [Image: 38 Studios]
Rhode Island Governor signs 38 Studios settlement bill
Following successful votes in the Rhode Island Senate and House of Representatives, a bill designed to help settle the 38 Studios fiasco was signed into law by Governor Lincoln Chafee yesterday. Lawmakers hope that the bill will encourage settlements by shielding defendants from further litigation. Involved parties say that this bill will pave the way to recover as much as possible of the $90 million that Rhode Island is responsible for paying following the defaulted loan to 38 Studios.
38 Studios settlement bill clears Rhode Island House of Reps
A bill to promote out-of-court settlements for lawsuits over the collapse of Curt Schilling's 38 Studios has passed through the Rhode Island House of Representatives this week. The bill, which passed in a vote of 53-16, would protect defendants who settle from lawsuits filed by co-defendants over damages those co-defendants are found liable for. In layman's terms, the bill encourages settlements and provides a legal buffer: If a 38 Studios official settles with the state, they will not be able to seek those due damages from any other 38 Studios official tied up in legal proceedings. Now all that's left is for Governor Lincoln Chafee to sign off on the bill before it becomes law. Another bill introduced earlier this month proposes the state of Rhode Island default on the $75 million loan it provided 38 Studios. Defaulting on the loan would get Rhode Island off the hook for a $12.5 million loan payment due later this year as part of the debt left behind by 38 Studios. Last year, a similar bill proposing the state default on the loan failed to gather momentum. [Image: Joystiq]
SOE's John Smedley blames Rhode Island government for 38 Studios closure
So who's at fault for the 38 Studios debacle? It's a question that's been thrown around a lot with no clear answers. But John Smedley of Sony Online Entertainment thinks that it's a pretty clear case of the state of Rhode Island getting involved in something it shouldn't have and then backing out at the worst possible time. He stated on Twitter that having seen the game himself, it had potential and it could have been something if it had actually made it to release. Smedley agrees with Governor Lincoln Chafee that the funding deal was a bad idea and should never have taken place, but once it had taken place, it was in the state's best interest to aid the studio rather than letting it fail. Chafee's comments and naysaying for the project doomed the chances of the game getting any additional funding, ultimately shuttering the studio altogether. Despite that, Smedley also notes that in the long run it was a bad idea that should never have taken place and that SOE was approached for funding on the game and declined, which he suggests should have been indication enough for Rhode Island not to make the deal. [We've updated the title to make utterly clear that of course we (and Smed) were talking about the government of Rhode Island, not some random people in Rhode Island, many of whom obviously did not vote for said government. After the break, we've also quoted the relevant tweets, among them the one in which Smed declares that but for Chafee's actions, we'd be playing the game right now.]
Rhode Island House to vote on out-of-court settlements for 38 Studios fiasco
After a successful vote yesterday from the Rhode Island House Judiciary Committee, the full state House of Representatives is set to consider legislation next week that encourages out-of-court settlements in Rhode Island Commerce Corp.'s lawsuit against 38 Studios and its founder, Curt Schilling. The bill, which won unanimous support in the House Judiciary Committee and has already been passed by the Senate, is designed to protect defendants who settle in this case from lawsuits levied by co-defendants found liable for damages. Fallout from the collapse of the Kingdoms of Amalur: Reckoning studio has left Rhode Island stiffed on a bill that totals out to roughly $90 million; The attorney for the RICC believes this bill will provide for an increase in potentially recovered funds. In related but sad news, Schilling has revealed to ESPN that he was recently diagnosed with cancer. His statement expressed hope, with Schilling saying, "My father left me with a saying that I've carried my entire life and tried to pass on to our kids: 'Tough times don't last. Tough people do."
38 Studios founder Curt Schilling diagnosed with cancer
Curt Schilling, noted pitcher, baseball analyst and video game aficionado, has been diagnosed with cancer. Schilling, 47, revealed the news to ESPN in a statement. Schilling is most notable in the video game industry for his work with 38 Studios, a game development company he founded in 2006. 38 Studios, formerly Green Monster Games, was responsible for Kingdoms of Amalur: Reckoning and had been working on an MMO called Project Copernicus before shutting down in 2012. The state of Rhode Island, after guaranteeing 38 Studios a $75 million loan to move offices from Massachusetts, is still trying to figure out what to do with the debt left behind. An auction for 38 Studios' intellectual properties was held late last year, though the only properties known to have been sold off are the Big Huge Games trademark and the Rise of Nations and Rise of Legends properties. [Image: Wikimedia Commons]
Proposed Rhode Island bill would default on 38 Studios loan debt
38 Studios, the now-defunct company created by former Red Sox pitcher Curt Schilling and developers of Kingdoms of Amalur: Reckoning, left a big hole of debt in Rhode Island when it went bankrupt. A $75 million loan guarantee-sized hole, to be exact. Last week, the state's legislature introduced a bill that would rid themselves of that burden. According to an Associated Press report, Representative Karen MacBeth, D-Rhode Island, introduced a bill on Thursday that would cause the state government to default on the loan and thus prevent the Rhode Island Commerce Corp. from making any further payments toward it. Governor Lincoln Chafee argued that a default would harm the state's financial reputation and cause an increase in borrowing costs. This isn't the first time such a bill has been introduced; the AP also reports that an attempt to default on the 38 Studios loan failed last year. The state made a payment of $2.5 million in 2013, but the next payment is substantially larger: $12.5 million. And thus, the legacy of 38 Studios continues to be defined by messy financial arguments.
Rhode Island senate passes 38 Studios legislation
A major hurdle in paving over the bad feelings, poor decisions, and millions of dollars in unpaid loans that 38 Studios caused when it defaulted two years ago has been crossed, as Rhode Island's Senate has approved legislation to settle the affair out of court. The Senate unanimously passed a bill to shield from future lawsuits any party that settles with Rhode Island Commerce Corp. The RICC, formerly the Economic Development Corp., has been trying to figure out a way to recoup as much of the $90 million lost through former 38 Studios deals as possible, and the attorney for the state says that this legislation will increase any future recovery of those funds. The Rhode Island House of Representatives has to consider and vote on a similar bill for this to proceed. Lawyers say that the longer this case goes without a settlement, the larger the legal bills will be, which will diminish those funds the state does recover.
Legislation may pave a path for 38 Studios case settlement
Amazingly enough, the 38 Studios saga could be wrapped up soon if lawyers and the Rhode Island government agree on a path out of the legal swamp. The Associated Press is reporting that efforts are being made to settle the 38 Studios lawsuit out of the courts. Rhode Island's lawyer is encouraging the state senate to pass legislation allowing both sides to come to a settlement, as the remaining 38 Studios assets and resources are "being eaten up very rapidly." The state is suing Curt Schilling and 13 others over the $75 million loan that 38 Studios defaulted on back in 2012, looking for repayment plus additional compensation for damages. If the legislation passes and a settlement is reached, then the defendants would be protected from any further claims for compensation.
Legislation introduced to resolve 38 Studios lawsuit
The ongoing saga of 38 Studios and the state of Rhode Island continued on Wednesday courtesy of Governor Lincoln Chafee introducing a new piece of legislation to the state assembly. Specifically targeting the ongoing lawsuit, the legislation would be used as an inducement for the former company to settle with the state out of court rather than go through the lengthy process of a trial by ensuring that the named defendants will not face further litigation on the same causes. In more conversational terms, the bill states that if the defendants in the lawsuit settle out of court, they cannot be sued again in Rhode Island courts by other people over the closure of the company or other similar charges. Whether or not this will provide sufficient incentive for Curt Schilling and the other 13 defendants named in the lawsuit to simply settle remains to be seen.
SEC subpoenas the Rhode Island Commerce Corporation over 38 Studios lawsuit
After the last bit of immature name-calling over the 38 Studios debacle, it must be nice to finally put this whole mess to bed for good so we can... oh, wait. No, it appears that the drama regarding the dead studio continues as the Securities & Exchange Commission has issued a subpoena for the Rhode Island Commerce Corporation regarding its lawsuit against Curt Schilling and the other executives of 38 Studios pre-closure. The subpoenas request both depositions and exhibits pertaining to the ongoing court case against the management of the former studio. The RICC, formerly known as the Economic Development Corporation, was the organization responsible for selling bonds to facilitate the $75 million loan to the now-defunct gaming studio and has been under investigation by the SEC following the company's bankruptcy and dissolution. Neither the SEC nor the RICC is discussing any further details regarding the investigation.
Rhode Island governor calls Project Copernicus 'a lot of junk'
Were you surprised that Project Copernicus didn't manage to sell at auction? Rhode Island governor Lincoln Chafee wasn't. In recent statements to the associated press, Chafee stated that the property was "a lot of junk" and decried every step of the loan process for 38 Studios. In the governor's own words: "People just panicked and gave a retired baseball player a huge amount of taxpayer money with no experience in this industry or any other businesses." Curt Schilling (the second key player in this ongoing drama, with the other being the state of Rhode Island) responded to the governor's statements on Twitter, claiming that a failure is obvious in hindsight. He also cited Chafee's current job approval numbers, suggesting that the state as a whole would like the opportunity to re-do its gubernatorial election. Richard Land, the man in charge of auctioning Project Copernicus and other 38 Studios assets, is allegedly still looking for private buyers for the IP.
38 Studios' intellectual property auction in December, Project Copernicus on the table
The tragic tale of 38 Studios' unreleased MMO, Project Copernicus, isn't over just yet. The Associated Press reports that "[a]bout two dozen parties, including some overseas" have "expressed interest" in bidding for the intellectual property of 38 Studios, which includes the unfinished game. The auction, which was set to take place on November 14th but was delayed due to unexpectedly high demand, is scheduled for December 11th. Nick Jimenez, executive vice president of auctioneer Global Heritage Partners (which is handling the sale of the studio's intellectual property), stated that the potential buyers in the auction "are from North America, Europe, and Asia" and that "[s]ome have expressed interest in buying all the intellectual property, and some are eyeing parts of it." It's unclear what his means for the future of Copernicus, or at least of Copernicus as we know it, but be sure to keep an eye out for future developments.
38 Studios IP auction scheduled for December 11
Come December 11, Heritage Global Partners will finally begin selling off the intellectual property of Curt Schilling's 38 Studios. Initially slated for November, the auction was delayed due to "greater than expected" interest from potential bidders. The state of Rhode Island is hoping that this auction will allow it to recoup some portion of the $75 million it loaned 38 Studios, so it only makes sense to attract as many bidders as possible. Among the items included in the auction are sequel and licensing rights to Kingdoms of Amalur: Reckoning, rights to Big Huge Games' Rise of Nations and Rise of Legends strategy games, and "Project Copernicus" which the auction house describes as "an in-development Massively Multiplayer Online Role Playing Game (MMORPG) including a 10,000 year world history, completed character 'races' and playable 'zones.'" Full information on the auction can be found at the Heritage Global Partners website. Initial bids will be accepted as late as 5PM EST on December 4.
38 Studios assets auction dated for November 14
We first got word of an auction to sell off 38 Studios' assets for Project Copernicus earlier this month, but now we have an actual date for the auction: November 14 and 15. This sale will include the Amalur universe IP and all merchandise and sequel rights to the single-player Kingdoms of Amalur: Reckoning, as well as IP rights to the properties of Big Huge Games. If you'd like to buy yourself an MMO, this might be the time. Head over to the auction page for more information.
38 Studios loan under SEC investigation
It seems as though we can't go more than a few weeks without hearing about some new complication related to the collapse of 38 Studios and the financial catastrophe it left in its wake. This week's news comes in the form of an SEC probe into the $75 million in loan guarantees offered to the studio by the Rhode Island Economic Development Corporation. The RIEDC has secured the services of a law firm to help it handle the SEC's investigation. Further details are sparse, as the RIEDC has offered only that it "doesn't discuss ongoing matters related to 38 Studios and maintains a level of confidentiality as requested by the SEC." Strangely, the SEC investigation, which launched in early 2012, was not mentioned to investors when Rhode Island published financial documents related to a bond transaction in April of that year. According to the treasurer's spokesperson, the state's treasury was not aware of the probe at that time. The RIEDC is currently involved in a lawsuit against studio head Curt Schilling and former RIEDC members responsible for the 38 Studios deal.
Lawsuit against Curt Schilling and 38 Studios allowed to proceed
According to a report in the Boston Globe, a Rhode Island judge has ruled that the state's lawsuit against baseball star Curt Schilling and his merry band of 38 Studios execs will continue, in spite of the defense's movement to dismiss the case outright. The suit, which began in May, was filed by Rhode Island's economic development agency, which alleges that 38 Studios' representatives knew the studio was financially unsound and effectively defrauded the state when it accepted its $75 million state loan three years ago. The studio was working on MMO Project Copernicus before it imploded and defaulted on that loan. Schilling has rejected those accusations and previously called Governor Lincoln Chafee a "dunce of epic proportions" in a daring bout of real-world smacktalk. So what's in it for Rhode Island? Aside from saving face, nothing much, just the reclamation of a cool $75 million in bonds it doesn't want to absorb plus triple in damages from Schilling and other executives. But let's not get ahead of ourselves, Rhode Island; the judge did rule that RI can't sue for the whole package just yet.
Curt Schilling discusses life after 38 Studios
There's not a lot of love in the gaming world for Curt Schilling. The closure of 38 Studios that left the state of Rhode Island with a $75 million debt and hundreds of people out of jobs has colored perceptions. A recent piece from the Boston Globe takes a look at Schilling with a slightly gentler approach, discussing the heart attack he suffered eight months prior to the studio's closure and the stress he's felt over the failure. Schilling once again puts the blame for what happened at the feet of Governor Lincoln Chafee, who he claims failed to help 38 Studios when assistance was required. The article goes into more depth discussing the many assets from Schilling's baseball career that were auctioned off to pay damages, as well as his retirement from public life in favor of coaching his daughter's softball team. Those still interested in the fallout can take a look at the full article for more perspectives from both Schilling and his wife.
