RI Business
9:18 am
Thu January 3, 2013

2012 News Countdown: The collapse of 38 Studios

(PROVIDENCE, RI) It was a busy year in the Ocean State, and Rhode Island Public Radio’s counting down the ten biggest stories of 2012. Topping the list – is the implosion of the 38 Studios deal.

When then-Rhode Island Gov. Donald Carcieri in 2010 pushed a $75-million taxpayer-backed loan to Boston Red Sox World Series hero Curt Schilling’s video game company, the state’s economic officials and leading politicians hoped it would be the anchor for a growing video-game business cluster in Providence.
That all came crashing down in 2012. Governor Lincoln Chafee, an opponent of the deal, questioned Schilling’s finances. Then the company, 38 Studios, defaulted on one of the first payments to the state and quickly cratered into bankruptcy. The 400 employees of 38 Studios lost their jobs, and auctioneers rolled into town selling trinkets, boxes of unused computers, t-shirts and even swords to the highest bidders.

The governor hired a lawyer and the state sued Schilling and a bevy of financial advisers and lawyers who forged the deal. This saga will spill into 2013 as the lawsuits try to fix blame on the major players and recover money for taxpayers.

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