38 Studios files for Chapter 7 bankruptcy

38 Studios is officially no more. WPRI.com reports that on Thursday, the game developer behind the fantasy RPG Kingdoms of Amalur: Reckoning filed for Chapter 7 bankruptcy. That means the company will close down and its assets would be liquidated.

The company, founded by former Boston Red Sox pitcher Curt Schilling, received a $75 million loan from the state of Rhode Island in 2010. However, in May the company got hit with financial problems that ultimately resulted in all of its employees being laid off. In this week's bankruptcy filing, 38 Studios says it owes $150.7 million to 1,079 creditors, with the single largest debt being $115.9 million owed to the state of Rhode Island.

With the bankruptcy filing, 38 Studios can now sell off its assets, including the rights to Kingdoms of Amalur: Reckoning and its proposed MMO game, Project Copernicus. It's possible that one or more game developers or publishers could buy the rights to these games.

Meanwhile, law enforcement officials in Rhode Island have also launched a criminal investigation into 38 Studios. Rhode Island State Police Col. Steven G. O’Donnell stated, "Everything is on the table. Rhode Island Institutions, banks, anybody federally insured and any venture capital money that has come into the company."

Schilling has mostly stayed silent about what happened to 38 Studios. He did offer some public comments a few weeks ago, claiming that the state of Rhode Island had broken promises to the company, which the state's governor has denied.

Source: WPRI.com

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Are you sure they can sell the rights to Kingdoms of Amalur: Reckoning and its proposed MMO game, Project Copernicus? It is my understanding that part of the loan agreement with the state of Rhode Island was that in the event of a default these would go to the state. This would mean it will be Rhode Island selling it not 38 Studios (unless Rhode Island wants to keep it for some reason)

I was really, really looking forward to the Amalur MMO. I had a blast in KoA:Reckoning. I really hope someone picks up on it, rather than letting Salvatore's work go to waste.

If RI broke promises and the gov. was saying all that about the studio then they are also digging thier own grave, as that is going to scare other businesses away from trying the same thing that 38 did and not make them trust the RI govt. I wouldn't locate there under that kind of situation because of how the govt handled the whole thing.

This is also why it's a better idea to go it yourself without relying on loans and investors, they call the shots and you loose control, as well as the threat of having money taken from you at any given moment makes stuff unstable and insecure. it also stresses everyone out and your game turns out not as good as it could be because stress can mess yah up and not make you be able to give your all.