38 Studios Bankruptcy Hearing Begins in Delaware - ABC6 - Providence, RI and New Bedford, MA News, Weather

38 Studios Bankruptcy Hearing Begins in Delaware

by Mark Curtis

mcurtis@ABC6.com

     A bankruptcy hearings got underway Tuesday afternoon concerning the failed 38 Studios video game company based  in Providence.

     Page after page, after pages of creditors. This is just some of the information the bankruptcy trustee for 38 Studios is having to sift through in Court. URI Business Professor Ed Mazze has been a trustee in over 6 thousand bankruptcies. Since Rhode Island loaned Curt Schillings 38 studios 75 million dollars, the state is first in line to collect.

     Dr. Ed Mazze, URI Business Professor said, "If the assets are were three million dollars when this was all said an done, the bulk of that money will go to Rhode Island."

     It is possible that remaining 38 studios assets can be sold....including an unfinished video game in development, known as Copernicus. Professor Mazze said, "So if the trustee can find somebody to buy Copernicus fro 10 millions dollars, the trustee is getting a percentage of that ten million dollars."  

     ABC-6 Political Reporter Mark Curtis said, "Now there are other legal proceedings beyond bankruptcy. We know the Rhode Island State Police, and federal investigators are also looking into 38 Studios."

     We should be very clear -- so far no criminal activity has been disclosed.   If those agencies find any evidence, they must give it to the bankruptcy trustee, according to Dr. Mazze,
"Because if some of these assets were generated through criminal means, the trustee can't be giving away money that's not money of the estate."

    After Rhode Island, former 38 Studios employees who were not paid, are next in line if any assets can recovered -- a process that could go well into next year.