38 Studios Declares Bankruptcy, Authorities Opening Investigation
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38 Studios LLC and its three subsidiaries filed for Chapter 7 bankruptcy protection on Thursday in Delaware, meaning they have ceased operations and will be liquidated.
38 Studios LLC said it owes between $100 million and $500 million to at least 1,000 creditors, many of them in Rhode Island, court documents show. The parent company estimated its assets at between $10 million and $50 million and told the court it does not expect it will have any funds available to pay off unsecured creditors.
In addition, 38 Studios Baltimore LLC said it owes between $50 million and $100 million to at least 200 creditors, documents show. The Baltimore subsidiary, which estimated its assets at between $500,001 and $1 million, is the former Big Huge Games studio that produced 38 Studios' debut game, (Kingdoms of Amalur: Reckoning,) which was released in February.
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Separately, federal and state law enforcement officials confirmed the launch of a formal probe into 38 Studios and its efforts to secure Rhode Island tax credits to remain afloat.
(The state police, the attorney general's office, the U.S. Attorney's office and the FBI are opening an investigation into 38 Studios, both the money that came from the state as well as the money that came from Bank Rhode Island,) Rhode Island State Police Col. Steven O'Donnell told WPRI.com on Thursday afternoon.
(I can confirm that the U.S. Attorney's office has been in contact with FBI and state police on the 38 Studios matter,) Jim Martin, a spokesman for Rhode Island U.S. Attorney Peter Neronha, told WPRI.com. (There has been contact for some time.)
