And that’s the end of that.
38 Studios LLC, the financially-strapped video game dream started by former Red Sox ace Curt Schilling, has filed for Chapter 7 bankruptcy, which clears the way for creditors to come in and take the scraps of the company.
The bankruptcy, filed in Delaware, indicates that Schilling and his team have given up hope of finding an investor to save the troubled game developer.
Chapter 7 is more serious than Chapter 11, commonly known as “bankruptcy protection.” Chapter 7 indicates the end of a company’s life.
In the 38 studios filing, the company mentions 1,000 creditors who are owned a staggering $100-$500 million, compared with $10-$50 million in assets.
The company reported it owes Rhode Island’s Economic Development Agency $115.9 million, which includes interest on the ill-fated loan the state guaranteed on behalf of the company.
“This action comes after several weeks when the company has reviewed, considered and received the recommendations and advice with respect to potential avenues for relief that are currently available,” 38 Studios said in a statement released Thursday afternoon. “After ongoing negotiations with the State of Rhode Island and potential investors and other interested parties, the company has been unable to find a solution to the current stalemate.”
The Boston Globe has reported that Rhode Island and federal authorities have recently launched investigations into the company as well. There are complaints that the company did not pay hundreds of its emmployees.
Founded by former Red Sox pitcher Curt Schilling as Green Monster Studios in 2006, the company was eventually renamed 38 Studios and moved from Massachusetts to Rhode Island after being offered the $75 million loan guarantee. The only stipulation was that it would, in return, bring tax revenue and jobs to Rhode Island. Unfortunately, 38 Studios’s first title, Kingdoms of Amalur: Reckoning failed to live up to sales expectations, leaving the young company short on cash. The future of the company’s second title, a currently unnamed massively-multiplayer online game, is uncertain.
The filing comes on the final day of the E3 expo in Los Angeles, where, several months ago, 38 Studios was expected to be a major exhibitor.
Neither Schilling nor a 38 Studios spokesman could be reached for comment.
John M. Guilfoil of the Blast Staff contributed to this report.
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