38 Studios defendants again ask judge to toss out RI lawsuit

Lawyers for founder Curt Schilling and other former executives ask Rhode Island Superior Court to dismiss state's suit against them.

A group of former 38 Studios executives have asked a Rhode Island Superior Court judge to toss out the state's lawsuit against them, according to The Providence Journal.

This marks the second time the bankrupt company has asked the court to dismiss the state's lawsuit since it was brought against them last year. In March, founder Curt Schilling sought dismissal of the suit on the grounds that 38 Studios did disclose the company's financial situation to the appropriate state officials.

Image credit: Steven Senne, AP

Lawyers for Schilling and former executives Rick Wester, Jennifer MacLean, and Tom Zaccagnino said the Rhode Island Economic Development Corp. (RIEDC) "failed to present any specific allegations to substantiate any claim that [the] 38 Studios defendants conspired or colluded with anyone to defraud the EDC."

The state claims it has "crushing evidence" that shows Schilling and other executives intentionally concealed financial information and maintains that the lawsuit should move forward.

Rhode Island originally sued Schilling and the other executives in November over the controversial $75 million loan that brought the studio to Rhode Island in 2010. Schilling has since called the suit "100 percent baseless" and the claims against him "implausible."

38 Studios filed for bankruptcy last summer and is now due to pay the state around $100 million with interest factored in.

Written By

Eddie Makuch is a news editor at GameSpot, and would like to see the Whalers return to Hartford.

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Discussion

50 comments
suade907
suade907

How does a company like Solyndra go belly up with no lawsuits yet a normal guy trying to make a good videogame practically gets shackles thrown on him.

G4mBi7
G4mBi7

I see nothing but ignorant comments in this post. The average AAA costs roughly $20 million to develop. KOA: Reckoning did NOT cost $75 million plus to develop, neither is the state suing the studio. The state is suing the executives who basically used the studio as a shell company to tunnel out funds from the loan into their personal bank accounts by means of bonuses.  The state didn't have much to gain from getting the loan back, the loan was essentially bail out money to prevent the studio from going under and keeping the jobs alive. The problem in this case was that the money was never used ti bail out the studio but to line the pockets of the executives. So yea;i hope the city gets some of its money back and the executives end up having to to personally file for bankruptcy after they've been milked dry.

blackothh
blackothh

with all the stupid articles of this stupid case, cant we at least get a new picture????????????

Riddick123
Riddick123

Well if 38 Studios owes RI money...what about Solyndra who owes the Federal Government hundreds of millions?  They went bankrupt too.  RI gambled and lost.

Fenrir777
Fenrir777

Im just sick of seeing this dudes face when im scrolling gamespot

SpaceDr00ze
SpaceDr00ze

I don't care much about the lawsuit, but I am terribly disappointed that 38 went under. Reckoning reminded me of what Fable should've been. I would've really liked to see a sequel. Fetch quests and all.

Llama345
Llama345

I still dont understand why this studio took such a suck ass deal that they needed to sell like 10 million units to break EVEN.  Not too many damn games sell that many copies. 

Thanatos2k
Thanatos2k

Look Rhode Island, you used taxpayer money to make an investment.  That investment failed.  

Deal with it.  You don't get your money back.

91210user
91210user

Nice to know that they're trying! Stuff like this in the game industry like being asked to repay a loan where the government knew years in advance that it wouldn't be done! Just shows how careless the government is! How are gamers suppose to pay for it? And we are paying for it!

decoy1978
decoy1978

Okay so your going to sue someone who went bankrupt? Where are they going to get the money? Even if the state of RI wins, collecting the money by liquidating all assets of the defendants won't be near the $100 mil. 

38 Studios as a company is no more, there is nothing to collect! Call it a bad investment. Fire the loan officers responsible for agreeing to the terms. You guys are wasting tax payer money.

106473
106473

Most couldn't complete the game because of a bug that will never be fixed.

PixelAddict
PixelAddict

What a mess.

Something tells me the state of Rhode Island (or any state for that matter) wouldn't know crushing from a hole in the ground.

SingletreeAve
SingletreeAve

How come nobody is suing REIDC for their epic fail in managing tax payer money. It was obviously a risky investment, regardless of 38 Studios disclosures.  Figuring that out only required basic math skills.

gamingnerd121
gamingnerd121

If there is this ''crushing evidence'' then surely there wouldn't be any chance this gets dismissed. Unless that's just something they made up.

TrueGB
TrueGB

With interest!!! 


frozenux
frozenux

People who talk with hands on their chest are usually so full of sh!t.

laethyn1
laethyn1

@G4mBi7 

Reckoning has nothing to do with it. It wasn't made by 38studios.

Additionally, it was paid for by EA, and all proceeds went back to them. 

Rhode Island offered the money to Schilling in exchange for him moving his company (38 Studios, NOT Big Huge Games, the makers of Reckoning) from Mass. to RI. so they could build the game Copernicus, NOT Reckoning.

Ignorant comments indeed ...

Stiler
Stiler

@G4mBi7 Umm, I think a lot of people don't understand what actually happened. 

 The state never gave them a "Loan" as bailout money. 

 38 studios  was originally in Massachusetts and were working on an MMO. Rhode Island offered them the loan in order to come to their state and make the game. 

They took the loan and moved shop, and then they ended up buying Big Huge Games (which were working on their own single player rpg). This game became Kingdoms of Amalur: Reckoning. 

All while they bought BHG and had them work on KOA they were still working on their mmo, it was in development for many years, delayed, etc. They were bleeding money because of this mmo, which was started before KOA was even part of 38 studios. 


The loan money was running out and they needed more investors. Curt though It'd happen" and was holding out for this (he didn't tell employees, etc). 


Then you had this new RI governor. He came into office after the previous governor had helped give the loan to 38 studios and he saw it as a political stepping stone. HE publically HUMILIATED 38 studios and tried to use the loan and the "failing" of a the company as a means to give him a leg up for elections/public image. 


However all he really did was help ensure that NO investor would touch 38 studios with a 10 foot pole. 

So with 38 studios low on funds, with the investors scared off thanks to the new governor airing dirty laundry on public news, they had no choice but to close shop. 

The blame lies with both 38 studios and the governor (if he REALLY cared about his taxpayers he wouldn't have scared off potential investorys and would have tried to save them from defaulting and going under, instead he made sure the taxpayers lost all that money invested into 38 studios). 

38 studios was also mismanaged, Curt hired family members and should have instead hired people to run the business how it needed to be ran, keeping a more hands off approach when it came to people being hired and where the money went. It's one thing to want to help design the game/mechanics, it's another to hire family members and pay them large salaries. This didn't help 38 studios at all and he shoulda stepped back and let someone manage 38 studios who had experience doing such a thing, as he didn't. 


kohle36
kohle36

@G4mBi7 You mean Schilling (and the executive branch) is sitting on a mini-fortune still while the company itself went under? That would be interesting, seeing as he's constantly gone on record crying of poverty and the loss of his baseball fortune. Where'd you find that, out of curiosity?

Thanatos2k
Thanatos2k

@Llama345 They needed 10 millions units to break even with the studio's costs, NOT Kingdom of Amalur's development costs.  Those two numbers were hugely different.

Why?  Because they were burning tons of cash making an Amalur MMO which didn't even get out the gate.  They blew so much of their money on wasted development costs for it, Amalur basically needed to sell to keep TWO games afloat, which was of course never going to happen.

And as such, like THQ (which similarly blew millions on failed MMO development) they go bankrupt.

anigmha
anigmha

@decoy1978 White-collar criminals already get away with too much in this country. If fraud did occur in this case, then let this not be another example of white-collar criminals getting off easy.

TJSpyke
TJSpyke

@decoy1978 How were they to know the studio was lying to them? And suing will allow the state to at least get SOME of the money they are owed.

laethyn1
laethyn1

@106473 

What game? They never released the game they were working on.

Or are you talking about Reckoning, which has nothing to do with the situation, as it was pre-funded and built by a different studio?

Also, I've played through it numerous times with no issues.

SilentXero
SilentXero

@SingletreeAve 

EXACTLY!!!!!!!!!!!!!!! REIDC are the ones who effed this up! RI just needs to cut it's losses and be done with it already. 38 Studios is already done; nothing left! 

laethyn1
laethyn1

@suade907 

No, he didn't. Rhode Island went to him and offered in exchange for him moving his company.

He did not go to them.

eric_neo3
eric_neo3

@Stiler@G4mBi7I agree with most of what you said except that he should have held top execs responsible for every penny, which he didn't. 

When the company was about to go under it's execs disappeared faster than a fart in the wind.

I do feel for Curt, he trusted his execs and they in turn screwed him and all of the studio's staff then did a runner.

laethyn1
laethyn1

@Thanatos2k 

My understanding is that they weren't making any money of Reckoning, as it was all going back to EA, who funded the title.

frozenux
frozenux

@tim1935@Gamer-Geek@frozenux It's not.there are several pictures of him with the same ring on the same hand and finger.