Schilling Sued

Curt Schilling Sued By Rhode Island Bank

Providence-based Citizens Bank is suing 38 Studios co-founder and former Major League Baseball pitcher Curt Schilling to the tune of $2.4 million in an attempt to recoup some or all of the loan it made to the now-bankrupt company.

News of the lawsuit emerges just one day after several subpoenas were issued in the attempt to track the money trail from the state’s $75 million load to the company and another loan of $8.5 million from Bank Rhode Island.

According to records, Schilling and 38 Studios secured a $2 million letter of credit from the bank and opened up a $350,000 corporate credit card account, to which $373,596 have been applied. The bank later allegedly received the following assurance:

“Schilling absolutely and unconditionally guaranteed to the bank the payment and performance of all indebtedness, obligations and liabilities of 38 Studios to the bank, then existing or thereafter arising.”

There’s no response from 38 Studios spokespeople or Curt Schilling directly, but it seems more and more likely that the final post-mortem on 38 Studios will be written in a courtroom, not a virtual world.

  • Beebster

    Sorry, guys, but this was almost in bad taste. No reason to be laughing! :(

  • http://twitter.com/chumppi chumppi, Riku M.

    All companies and employees should follow this 38 studios case and see what kind of bosses not to have in a company, what kind of bosses are bad. Loving the lawsuits.

  • http://profile.yahoo.com/THJWE4XEXAMAPW3CUGPFYCUDHE Prime

    Only way you can go after someone rather than the COMPANY is if he personally mixed his money with company money. THAT doesnt not mean give money to the LLC… an LLC by definition you get shares if you give cash to the LLC business function. its legal.

    I think these people are just grabbing at straws. sometimes tho a judge will do something wierd (or get paid off) and make a wacko decision … even if its wrong… it has happend MANY MANY times in history. Thats what they hope for some judge to make a decision  that goes against standard law.

    I mean do you think every judge or lawyer plays by the rules…most dont most likely sad but true. “Slip em 200,000″ you think theyd say no?

  • http://twitter.com/KliffUndersn Klifford von Undersn

    I’ve played Phoenix Wright, and I have no idea. It’s true though we will hear about more lawsuits. It only just started. Hope the employee’s get some sort of restitution from all of this :(

  • kristoffer karlsson

    One question I havent seen a word about is: Where the hell did all that money go? Yes games cost a lot of money. But somewhere there must have been accountants both inhouse and from investors seeing that “hey, we/they burn through cash waaaay too fast” long before all this. Someone must have seen this coming miles away and didnt slam the breaks. That person is a complete tit.

    • http://profile.yahoo.com/ITHF7XKYGVXFAPCDMDJTKHLBBU Lian Wan

      Has there ever been an sort of “total amount 38 Studios had access to” kind of thing mentioned?  Even an estimate?

      • kristoffer karlsson

        Nope, I havent seen any numbers regarding that.

  • http://www.facebook.com/people/Michael-Byrne/100001642673542 Michael Byrne

    Curt Schilling will lose a fortune but he won’t be on the hook for much besides any loans he “personally guaranteed”. 38 Studios is an LLC. This story is going to keep getting more and more interesting as the forensic accountants keep digging. The debt is actually much bigger than $150 million because you haven’t mention 38 Studios Baltimore also carrying about $121 million in debt and only an estimated $335,000 in assets. These are actually 2 bankruptcy filings.

    The employees are the ones that are hit the most though. Not only are they out pay, but some of them now have two mortgages (one in R.I. and one if Mass.) since the company that was handling the relocation program has stopped paying the mortgages since 38 stopped paying them. To be fair to that third party company (called MoveTrek Relocation) though, they did pay mortgages for the last few months without being paid by 38 at all so it’s not like MoveTrek just dumped everything as soon as 1 payment was missed.

    The state of R.I. is the one on the hook the worst to 38 Studios Creditors and will likely default on the bonds since they are more moral-obligation and not general obligation. Yes, this means it will be harder to borrow money in the future though.

    Just some general thoughts!
    -Magicman

    • http://www.facebook.com/people/Michael-Byrne/100001642673542 Michael Byrne

      P.S. Boston Globe is reporting that Schilling used things like his own personal gold coin collection to guarantee loans. This would mean that if he personally guaranteed loans from various banks with his own personal collateral and not company assets he will be on the hook for those loans.
      -Magicman

  • http://www.facebook.com/people/Miguel-Crespo/501398647 Miguel Crespo

    Cant  Curt Schilling do some tv commercials for pepsi or somethihng  for the cash?

  • jayremy

    One of my most anticipated MMORPG games has turned into a legal game…

    Pretty screwed up, obviously he had a lot to lose himself from the start when he invested millions of his own in the company. What has always boggled me about this, is the sheer number of dollars they went through and have showed zero gameplay of the MMO and should’ve maintained with KoA: Reckoning.

    I don’t see how Kurt Schilling or anybody managing finances could’ve let them reach a break point in funds before anything to avoid this situation. Hundreds of millions here put to where? It seems like the expenses were overly extravagant for how little work was getting done.

    I mean if they managed to get EA’s name slammed on their title why the heck couldn’t EA fund this? EA funded the total letdown “WoW-clone” we know as SWTOR, but they can’t give anything to an actual MMORPG with potential and uniqueness. All of the financial matters just don’t seem to make sense, either the money was funneled under the table somewhere or a blatant disregard to financial or business planning and management took place.