Rhode Island Sues 38 Studios for $75 Million Loan

You can't get blood from a stone, but the state of Rhode Island is going to try anyway. The state announced today that it has filed a lawsuit against Curt Schilling and various executives at the now bankrupt 38 Studios in an attempt to recoup the $75 million loan guarantee given to the studio to set up shop in Providence and create an MMO.

The 96-page complaint against 38 Studios and its advisors alleges fraud, negligence and civil conspiracy over the state-backed funding of 38 Studios' relocation to Rhode Island. 38 Studios shut down in May after failing to make loan payments and employee payroll. Earlier this month the company's physical assets were sold off in two separate auctions. The company's IP is expected to be sold off at some point too but the sale of these assets will not be enough to pay down the $75 in debt the company owed to the state.

"When it became clear that the company would not survive, I publicly stated my commitment to you that my primary goal would be to do everything within my power to protect the taxpayers of Rhode Island," Gov. Chafee said in a prepared statement. "I will work to minimize any loss of your hard earned taxpayer dollars."

Chafee, who seems to have a lower approval rating than 38 Studios does in Rhode Island right now, says the state of Rhode Island enlisted the help of attorney Max Wistow to investigate the state's position and 38 Studios' financial situation.

"The complaint on its own contains a great deal of important and illuminating information on how this deal unfolded," Chafee said in his statement.

"Litigation is often long and tedious," Chafee added. "The filing of this complaint is only the beginning."

You can read the entire complaint here (PDF), catch Chafee's statement here, or watch it to your left. Better yet, you can read Polygon's in-depth report on this latest wrinkle in the 38 Studios fight here.

Source: Polygon

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