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Wed December 11, 2013
38 Studios Update: Auction, Depositions + More
Intellectual property rights for 38 Studios, the failed video game that left Rhode Island taxpayers on the hook for $90 million, were slated to hit the auction block Wednesday. Nick Jimenez, executive vice president with Heritage Global Auctions, says via email there will be "more to report after the sales process is completed in the coming days." In the interim, an update on related developments:
-- Max Wistow, the lawyer hired by the state to cut losses from 38 Studios, says depositions in the case are expected to continue into 2014. Wistow says those already deposed include Michael Saul, former deputy director of the state Economic Development Corporation, and former EDC lawyer Rob Stolzman, and that former EDC director Keith Stoke's deposition is continuing. Wistow says the scheduling of a trial is expected as the next step after depositions, although he couldn't estimate a timeline.
-- Providence lawyer Richard Land, the receiver for the 38 Studios' assets being auctioned, says distribution of the net proceeds is "ultimately subject to court approval and I expect they will be applied against the bond debt."
-- State Senator Dawson Hodgson (R-North Kingstown), an outspoken supporter of creating an independent commission to investigate the state's 2010 deal with 38 Studios, tells RIPR he plans to formally announce a run for attorney general in January. Hodgson and House Minority Leader Brian Newberry see 38 Studios as a potentially strong political issue for the coming legislative session (see item 2). That's due in part to how the annual payment for 38 Studios' investors -- which has to be approved by the legislature, is due to increase from $2.5 million to $12.5 million in 2014.
-- 38 Studios' founder and former Red Sox star Curt Schilling has picked up more work with ESPN, as an analyst on Sunday Night Baseball. In a tweet last month, Schilling said the intellectual property for Kingdoms of Amalur represented "a billion dollar franchise" if someone bought it and put a team on it. "2 years later and still no ones done what we we're doing," Schilling wrote.
-- The Providence Journal's Katherine Gregg reports on how there were no bidders for a $50,000 study to determine how not paying back the investors for 38 Studios would affect Rhode Island. Hodgson suggests the work could be done by the well-respected fiscal staff for the House and Senate. "The idea that the only way we're going to get due-diligence is with a $50,000 study doesn't cut the mustard," he says. Then again, legislative leaders have shown little interest in Hodgson's idea for an independent commission. He says his bill for a commission has been well received, attracting 11 co-sponsors in the House and 8 in the Senate so far.