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38 Studios founder Curt Schilling sued for $2.4 million
38 Studios founder Curt Schilling sued for $2.4 million
June 15, 2012 | By Mike Rose

June 15, 2012 | By Mike Rose
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    15 comments
More: Console/PC, Business/Marketing



Citizens Bank, from whom the ill-fated 38 Studios borrowed money, is suing 38 founder Curt Schilling personally, after he allegedly promised to pay back the borrowed loan.

The Kingdoms of Amalur publisher declared bankruptcy earlier this month, after failing to secure financing from the state of Rhode Island or outside investors to continue its operations.

According to WPRI, Citizens Bank's lawsuit was filed on the same day that 38 Studios filed for bankruptcy, and alleges that Schilling personally guaranteed he would pay off a $2 million letter of credit and a $350,000 corporate credit card with the bank.

The bank is attempting to leverage retail brokerage company Morgan Stanley Smith Barney to pull the funds out of Schilling's personal bank accounts.

"Schilling is liable to the bank in the total amount of $2,394,240.40, plus thereafter accruing interest and late fees, costs and costs of collecting, including, without limitation, attorneys' fees and expenses," states the complaint.

It continues, "Schilling has failed and refused, and continues to fail and refuse, to satisfy the outstanding indebtedness," adding it is "likely to suffer irreparable injury" if it cannot recover any money in bankruptcy court.

The news comes as state and federal law enforcement agencies sent subpoenas to the various parties involved this week.


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Comments


Ken Love
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Couldn't of happened to a nicer guy. My best wishes to all of the families affected by this washed-up Baseball Player and 38 Studios. Perhaps a more appropriate / truthful name would have been 86'ed Studios. :-(

Joe McIntosh
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Filed suit the same day they filed bankruptcy? Wow, they don't waste any time.

Peter Christiansen
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While I will certainly be glad to see anyone who got swindled in this debacle get some form of recompense, I have to say that I'm not nearly as concerned about irreparable injury to banks and other large organizations as I am about irreparable injury to employees and other individuals. Unfortunately, they're at a much bigger disadvantage in this situation.

Here's hoping that Citizen's Bank isn't the only one that is able to recover some of its losses from the studio's collapse.

Jeffrey Crenshaw
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My sentiments exactly. I was happy when I saw the headline because I thought first of the employees that had to go without pay and healthcare. Oh well, I suppose it could still be seen as a net good that some accountability is being called for by a party infringed, even if it is a bank.

Colin Schmied
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Banks have employees and expenses too. And banks use your money to finance these loans. So getting back their money I'm sure is just as important to those people.

Those laid off will have unemployment to collect. So my level of sympathy is more of a shrug. Being laid off isn't "irreparable." It sucks at the time, but you deal with it and get on with your life. Often you find a much better job than you left. I've been laid off 3 times so I know what I'm talking about.

The people who got screwed over completely are the RI taxpayers who get stuck with loan costs as well as the some of the unemployment costs. The devs who got laid off at least got some pay and experience out of it. The taxpayers just got a bill.

Jeffrey Crenshaw
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@Colin

I think this is a special case though, as the employees went weeks without pay checks while being kept in the dark, were not told their health care expired, and some were told their original mortgages would be taken care of by 38 studios if they moved to RI and then found out recently they were on the line for their original mortgages as 38 reneged on the deal.

Agreed with you regarding the RI taxpayers though. This is why I generally don't think playing favorites with companies is part of the government's responsibilities, particularly in this case as it is obviously just some government representative going ga-ga over a celebrity.

Robert Alvord
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OK, so can the American citizens get their $700+ Billion in bailout money from the banks too? I mean, if we're going after people for borrowing money, it seems the banks should get in line behind the rest of us first.

Michael Rooney
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@"OK, so can the American citizens get their $700+ Billion in bailout money from the banks too?"

They are already giving it back. Most of the bailout money was through loans. They've already been almost half paid off.

http://projects.propublica.org/bailout/main/summary

Comments like this one are disheartening; it's awefully depressing how little American's are aware of the state of their own government.

Daye Williams
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As a person, he doesn't deserve this. As a businessman, he totally deserves this.

JB Vorderkunz
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not trying to be a jerk, but: how do you separate those two things? Oh that drug lord, he's a good guy. That hedge fund manager doing a ponzi scheme, he's a real stand up dood.

just sayin' =)

Daye Williams
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lol True. But Robin Hood stole, but it was to feed the poor but, thou shall not steal (they said it in that book you find in hotels that was about that dude's son). I think you could be a good person separate from your M.O.

Terry Matthes
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I don't get how the bank can sue him. Isn't the whole business model behind a bank to weigh the risk of lending. That's like making a bad bet at the Casino and then sueing the house for what you should have won.

Jeffrey Crenshaw
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My take is that banks (and other financial institutions) want all the public glory of being "risk takers" but none of the risk (see also: government bailouts of financial institutions).

Jonathan Murphy
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38 Studios had to keep spending money, hiring people to meet their qouto with the state. The amount and timeline wasn't realistic. Schilling still pushed it through and didn't take responsibility. You don't get to ruin 400 lives, cost a state millions and keep your money.

Aaron Fowler
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It's all just a really big mess. Best of luck to everyone affected.


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