38 Studios Unable To Pay Employees
Things keep looking worse and worst for Curt Schilling’s 38 Studios. After failing to make a $1.125 million payment earlier this month, it now turns out that the company can’t even pay for it’s 400 some-odd employees who work there. According to a source talking with Joystiq, not only were they unable to make payroll this week, but they also let go all temporary workers and contractors.
The company was lured to Rhode Island in 2010 as part of an effort by the state to attract more jobs. It was considered a risky move by R.I., attracting a fledgling video game company with promises of a $75 million bond, but at the time it was deemed that the rewards would more than make up for the risk. It’s looking like the rewards won’t be following, however, and the state will be on the hook to pay off the $75 million bond plus interest until 2020 if the company flounders. This debacle has already cost one man his job: head of the REIDC Keith Stokes, who approved the loan in 2010 resigned Wednesday night.
The company did try to make the overdue $1.125 million payment, but after the company’s CFO informed the EDC that there were insufficient funds to cover it, the check was returned. There is one slight positive to this whole mess, however. If the company were to collapse, Rhode Island will gain possession of any and all of 38 Studios’ IP’s. However, at this time the only game produced by the company was Kingdoms of Amalur: Reckoning, and while it was a modest hit, it hasn’t exactly set any records. While the state could sell off the IP, it likely won’t be enough to recoup the more than $100 million it will have to pay for the loan.
