The state of Rhode Island announced that they will be filing a lawsuit against 38 Studios for failing to make payments their $75 million government loan. The lawsuit alleges fraud, negligence and civil conspiracy over the state-backed funding of 38 Studios’ relocation to Rhode Island. As of now, the state has enlisted the help of attorney Max Wistow to investigate the state’s position and 38 Studios’ financial situation.
The company declared bankruptcy back in June of this year, with their assets being acquired by Rhode Island, and put up for public bidding. An auction held by Big Huge Games, one time subsidiary of 38 Studios, brought in approximately $180,000, with Rhode Island’s own bidding bringing in $650,o00 (via the Associated Press). As of now, 95% of the studio’s assets have been sold.
“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,” Governor Chafee said in a prepared statement. “I will work to minimize any loss of your hard earned taxpayer dollars.”
You can read the entire formal complaint here (PDF) or find Gov. Chafee’s statement here.
Report filed by Rakan Stanbouly