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38 Studios safe from federal criminal charges
38 Studios safe from federal criminal charges
October 1, 2012 | By Eric Caoili

October 1, 2012 | By Eric Caoili
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Federal authorities will not pursue criminal charges against Kingdoms of Amalur publisher 38 Studios over its handling of millions in loans before the company collapsed earlier this year.

Rhode Island's U.S. Attorney's office began conducting a review in June to see if 38 Studios' management had broken any federal laws, such as bank fraud, hoping to find out if the studio provided false information when seeking loans to keep the company afloat.

When 38 Studios missed the deadline for a loan payment to Rhode Island in May, the cash-strapped publisher was forced to lay off its entire staff of nearly 300 employees, declare bankruptcy, and close before it could complete the MMORPG project the team had worked on for several years, "Copernicus."

The company's bankruptcy filings revealed that 38 Studios owes $150.7 million for loans from banks and the state, while its subsidiary Big Huge Games owes over $121 million. Rhode Island's losses could total to over $100 million as a result of 38 Studio's collapse, including its $75 million loan to the publisher plus interest.

While a spokesperson for the U.S. Attorney told the Associated Press that no further federal action is planned against 38 Studios, Rhode Island's State Police is still investigating to see if 38 Studios broke any state laws.

The government-owned Rhode Island Economic Development, which oversaw the loan arrangement that helped convince 38 Studios to move to the state from Massachusetts, has also hired a law firm to look into whether anyone can be held financially liable for the deal.


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Comments


Rodolfo Rosini
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But it was never a federal issue now was it? Also if it is found that the due diligence by RH was non-existent, especially on the financial side, then can the taxpayers sue those involved?

Benjamin Quintero
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The People vs Rhode Island does have a certain ring to it...

Fred Zeleny
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Hooray? I suppose that's a nice thing, but it's not like any of us ex-employees will ever see a penny of the thousands of dollars we're each owed in back pay. At this point, every news article is just more salt in the wound.

Eric McVinney
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Just wondering; Can't you and some others that were laid off sue the execs or whoever responsible?

Jane Castle
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It costs lots of money to sue people..... lawyers aren't cheap I can assure you.....

Eric McVinney
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That I'm fully aware of, but those that have been affected by this can pool together the money and still sue even if it's years from now.

Fred Zeleny
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Possibly, but most of us were more concerned with immediately looking for jobs, dealing with suddenly losing our insurance, dealing with the rebounding debts that came from all of this, and so forth.

And in terms of getting paid from the studio's remains, I know the employees are behind Rhode Island and a bank, so I doubt they'll leave so much as a penny for us. And anyone who would have the money to pay us all back also surely has the money to drown us in lawyers.

Eric McVinney
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All the more shame there is, then. It's too bad those execs cheated everyone out of their wallets and will continue on in their careers >:|

Michael Rooney
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If you have a good case and win you should be rewarded some money for legal fees. If there's a good case for it it's at least worth talking to a lawyer about to see your options before dismissing it as too expensive.

Troy Walker
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sounds more like a case where the company followed the thin vail of rules applied for the loan, and the state doesn't want to reveal its' inadequacy to spend its' citizens money wisely.

John Ingato
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But I'm sure Curt Schilling still has millions in his bank account

Matt Cratty
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He lost over 50 million of his own money. Not that that makes it all okay. He's not rich anymore.


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