Former Boston Red Sox pitcher Curt Schilling’s videogame company, 38 Studios, LLC and a related Maryland company, recently filed for bankruptcy protection in Delaware. Late last month, Schilling made local news headlines when he publicly blamed Rhode Island Governor Lincoln Chafee for the bankruptcy. However, it was later revealed that the company was headed for bankruptcy before Governor Chafee publicly mentioned its financial predicament.
According to court documents, 38 Studios spent more than $133 million before it declared bankruptcy. It claims that it owes more than $270 million. The expenditures include the company’s operation expenses, totaling $118 million. These expenses were incurred between its founding six years ago and December 2011. The company did not earn any money during this entire time period.
Curt Schilling paid the company’s bills. The company later used $75 million in proceeds obtained from a loan that was backed by Rhode Island taxpayers to fund its operations. The company was lured to Rhode Island two years ago from Massachusetts after receiving this loan. The Rhode Island Economic Development Corp., which awarded this loan, is looking to seize equipment, software and intellectual property belonging to 38 Studios. The Rhode Island Economic Development Corp. is also seeking permission to place 38 Studios into a state receiver’s hands.
Schilling contends that the company’s collapse cost him his entire baseball fortune. Time for a comeback?