Rhode Island’s Suit Against 38 Studios to Proceed

A lawsuit filed by the Rhode Island Economic Development Corp. (EDC) last November against 38 Studios has been allowed to proceed by Superior Court Judge Michael Silverstein.

The law suit involves former studio founder Curt Schilling, several executives and other former members including executive director Keith Stokes. All of whom have been pointed out to be involved with “fraud, negligence, breach of fiduciary duty and other acts that misled the agency’s board into approving a $75 million state loan guarantee for the company in 2010.”

“I am gratified by the Court’s initial ruling in the 38 Studios case,” Rhode Island Governor Lincoln Chafee said in a statement provided to Polygon. “It allows the important claims to proceed and is a significant first step to recovering the taxpayers’ losses.”

The $75 million loan was granted to 38 Studios back in 2010 but in 2012 the developer declared bankruptcy just a few months after having shipped Kingdoms of Amalur: Reckoning.

The suit, which was filed late last year, alleges that “38 Studios failed because of risks that had not been disclosed to the EDC Board, but were or should have been known by” those with knowledge of the studio’s financial situation, among them executives at the developer and EDC employees.

In March of this year a plea to dismiss the suit was pushed forward by the defendants, one which the judge rejected. The next hearing in the ongoing legal saga is set for September 13, 2013.

During the launch months of Kingdoms of Amalur: Reckoning, many seemed to be put off by the heavy flavor extracted from World of Warcraft. I personally found the game entertaining except that the sluggish storyline was disappointing. Ironically, sales of the game almost doubled following the closure of the studio shortly after the game’s launch.