Rhode Island Bank Sues Curt Schilling

 Pages 1 2 NEXT
 

Rhode Island Bank Sues Curt Schilling

image

Citizens Bank says the founder of collapsed Kingdoms of Amalur developer 38 Studios is personally responsible for $2.4 million.

Not entirely surprisingly, fallout from the collapse of 38 Studios is starting to come down on the head of Curt Schilling, the former Red Sox ace and long-time gamer who founded the studio in 2006. After a rapid spiral downward, the studio declared bankruptcy earlier this month, leaving a mountain of debt in its passing, but Citizens Bank says Schilling "personally guaranteed" nearly $2.4 million in credit the bank extended to the studio, and now it wants him to pay up.

In November 2010, according to the complaint, Citizens Bank provided 38 Studios a $2 million letter of credit, which it used as a security deposit on the One Empire Plaza building in Providence, Rhode Island, to which it relocated in April 2011; shortly thereafter, 38 Studios opened a separate $350,000 corporate credit card account with the bank. But the studio defaulted on a payment of just over $371,000 on the line of credit, leaving it on the hook for a total of $2,060,241, while the amount owing on the credit card as of June 7 is just over $373,000.

The grand total comes to $2,394,240.40, a figure that's just going to go up as interest, legal fees and other costs accrue. Unfortunately for Schilling, the bank claims that he "absolutely and unconditionally guaranteed to the Bank the payment and performance of all indebtedness, obligations and liabilities of 38 Studios to the Bank, then existing or thereafter arising." In other words, Schilling said he'd cover it, and now the bank is knocking.

As if that's not bad enough, this apparently isn't the only 38 Studios loan Schilling personally guaranteed. He did the same for a $4 million line of credit, later reduced to $1.5 million, with the Middlesex Savings Bank in July 2010. Schilling has not yet commented on the lawsuit.

Source: WPRI

Permalink

And so it begins...

In my head, Schillings situation is kinda starting to look like this:

But with Schilling as Sparrow and investors for cannibals.

Jesus, guy can't a break can he?

I had a feeling this was going to get ugly, and it looks like the shit hit the fan.

*sees shit covered ceiling*

At least he is not blaming used games

He can afford it.

oh well and hear i was hoping something good would come out of all this guess it didn't or its so shit covered its hard to see

fucking idiot. should of thought with his head with that much money. then makes an MMO. and turns it into a single player game.

draythefingerless:
fucking idiot. should of thought with his head with that much money. then makes an MMO. and turns it into a single player game.

Clarification: Kingdoms of Amalur only purpose was to set up the setting for an MMO, not that they were making an MMO and decided to just turn it into a single player game.

OT: I do feel kind of bad for the guy, but I seriously cant help but to think that he is just reaping the consequences of his actions if he was taking all of this money,seemingly knowing that he had no way to repay it.

Let's forget everything else for a moment and look just at the numbers: Why is a start-up game studio with one game under their belt dealing with this much money anyway? This is why independent studios are thriving, they make fantastic games for cheap, until they can invest more money into a project.

The basket, there is only one, and it is full of eggs.

I guess that 38 Studios wasn't an LLC. Not a very smart way to do business. Or maybe it was and Citizens Bank is trying to juke the laws. But, they did declare bankruptcy. Meaning that if he had his personal name on anything, he is boned.

The funny thing about loans to start businesses is that the business does not yet exist to be held liable for the loan instead of the person starting the business. The business doesn't have a credit history, so the owner must take on the risk and liability for the loan. My father had to do this to buy a business. Ten years later, when he wasn't able to collect money owed him by his customers faster than he owed it to others, he was forced out of business by his landlord but was still liable for the original loan. If Mr. Schilling wants bankruptcy protection, he will need to declare bankruptcy himself.

Baresark:
Not a very smart way to do business.

That seems to be par for the course with Schilling. I believe he also secured multiple loans backed by promised tax credits . . . which weren't promised and never arrived.

Seriously guys, these articles are fucking screaming for some baseball jokes...

On a serious note... I feel bad for the people Schilling employed, not him.

http://content.usatoday.com/sportsdata/baseball/mlb/salaries/player/Curt-Schilling

Fiz_The_Toaster:
Jesus, guy can't a break can he?

I had a feeling this was going to get ugly, and it looks like the shit hit the fan.

Does he deserve a break, though?

Zachary Amaranth:

Fiz_The_Toaster:
Jesus, guy can't a break can he?

I had a feeling this was going to get ugly, and it looks like the shit hit the fan.

Does he deserve a break, though?

I'm not saying he deserves one, but, I mean, how much more crap can be thrown at him for this before it starts getting ridiculous?

Fiz_The_Toaster:

I'm not saying he deserves one, but, I mean, how much more crap can be thrown at him for this before it starts getting ridiculous?

It seems he deserves a lot of crap, so it's hard to call it ridiculous.

Keep in mind I'm a big fan of KOA. I love the title, but the shit that happened behind the scenes? Wow.

Zachary Amaranth:

Fiz_The_Toaster:

I'm not saying he deserves one, but, I mean, how much more crap can be thrown at him for this before it starts getting ridiculous?

It seems he deserves a lot of crap, so it's hard to call it ridiculous.

Keep in mind I'm a big fan of KOA. I love the title, but the shit that happened behind the scenes? Wow.

The shit behind the scenes was disgusting, and I really hope that kinda shit never happens again (although that might be wishful thinking on my part).

Well, I meant that after this recent ordeal, to be fair he had it coming since he did go after banks for some cash and now he has to fork it over so he should've known better, if anything else happens then I might call foul, no pun intended.

Too bad they shut down the company first before going after Schilling. It's the developers that deserve a break here.

Baresark:
I guess that 38 Studios wasn't an LLC. Not a very smart way to do business. Or maybe it was and Citizens Bank is trying to juke the laws. But, they did declare bankruptcy. Meaning that if he had his personal name on anything, he is boned.

38 Studios was an LLC but its not uncommon for lenders to ask directors of LLCs for personal guarantees for loans to LLCs. When I started up my business 15 years ago the bank wanted my house as collateral for the loans that I needed to start up the company. Those loans are all long since paid off now but at times it was touch and go.

Personally I suspect the big problem with the whole thing is Schilling. To be a pro sportsman takes talent, drive and ambition. It appears that Schilling applied the drive and ambition but he doesn't have the talent to run a business. He took too many risks in what turns out to be the top of the market and had no plan B. Schilling is not alone in this but like all the others he is going to face the consequences.

RaNDM G:
Too bad they shut down the company first before going after Schilling. It's the developers that deserve a break here.

They can't go after Schilling first. The guarantees only apply after the company defaults on payments. Its like that for reason, you don't want banks grabbing individuals assets because the company which they are standing guarantor for might default on payment.

Fiz_The_Toaster:

The shit behind the scenes was disgusting, and I really hope that kinda shit never happens again (although that might be wishful thinking on my part).

Sorry, I just have to ask...

What the hell are you talking about?

What does your mind think is 'disgusting' about this turn of events?

Seriously, what are you talking about here?

Sober Thal:

Fiz_The_Toaster:

The shit behind the scenes was disgusting, and I really hope that kinda shit never happens again (although that might be wishful thinking on my part).

Sorry, I just have to ask...

What the hell are you talking about?

What does your mind think is 'disgusting' about this turn of events?

Seriously, what are you talking about here?

I think he lives in world no businesses ever go bust due to poor decisions by the those in charge. That the games industry is some how immune to all the problems of poor management and falling sales.

albino boo:

Sober Thal:

Fiz_The_Toaster:

The shit behind the scenes was disgusting, and I really hope that kinda shit never happens again (although that might be wishful thinking on my part).

Sorry, I just have to ask...

What the hell are you talking about?

What does your mind think is 'disgusting' about this turn of events?

Seriously, what are you talking about here?

I think he lives in world no businesses ever go bust due to poor decisions by the those in charge. That the games industry is some how immune to all the problems of poor management and falling sales.

Not sure what you're about either, don't confuse me with a Curt Schil err sympathizer...

Poor management and falling sales, isn't worth the attention this topic warrants.

Sober Thal:

Sorry, I just have to ask...

What the hell are you talking about?

What does your mind think is 'disgusting' about this turn of events?

Seriously, what are you talking about here?

I think he lives in world no businesses ever go bust due to poor decisions by the those in charge. That the games industry is some how immune to all the problems of poor management and falling sales.

Not sure what you're about either, don't confues me with a Curt Schil err sympathizer...

Poor management and falling sales, isn't worth the attention this topic warrants.[/quote]

I'm not confusing you with Schilling sympathizer. I just think the toaster bloke live in the world where the games industry in like every other industry. Gaming, like every other market sector, has companies that go bust. They go bust usually because the management makes bad decisions. It isn't disgusting, it isn't immoral, its just business. You take a risk and it doesn't pay off. Look what happened to Apple when they got rib of Jobs in the 90s. Schilling tried and failed to run a medium sized business, he lost a boat load money and so did other poeple. But there is no reward without risk, and this time it didn't pay off.

Sober Thal:

Fiz_The_Toaster:

The shit behind the scenes was disgusting, and I really hope that kinda shit never happens again (although that might be wishful thinking on my part).

Sorry, I just have to ask...

What the hell are you talking about?

What does your mind think is 'disgusting' about this turn of events?

Seriously, what are you talking about here?

Just taking a stab in the dark here, but I'm pretty sure they were referring to the way the employees were treated and kept in the dark, then unceremoniously dumped with no warning.

For some reason, whenever I hear the name Curt Schilling I imagine Homestar Runner.

Did he never get into the concept of limited liability?

I'm not sure why he would even let this go to court. If he personally guaranteed the loans, he's on the hook for them... this isn't a legal gray area. He's just going to drive up what he ultimately owes in interest and legal fees.

You made a bad call. Man up and pay your debts, Curt.

TheBlueRabbit:

Sober Thal:

Fiz_The_Toaster:

The shit behind the scenes was disgusting, and I really hope that kinda shit never happens again (although that might be wishful thinking on my part).

Sorry, I just have to ask...

What the hell are you talking about?

What does your mind think is 'disgusting' about this turn of events?

Seriously, what are you talking about here?

Just taking a stab in the dark here, but I'm pretty sure they were referring to the way the employees were treated and kept in the dark, then unceremoniously dumped with no warning.

I must have missed the part where the employees were treated badly... lemme read again...
nope, still don't see it. Unceremoniously dumped without warning... nope, don't see that either.

What article are you referring to?

TheBlueRabbit:

Sober Thal:

Fiz_The_Toaster:

The shit behind the scenes was disgusting, and I really hope that kinda shit never happens again (although that might be wishful thinking on my part).

Sorry, I just have to ask...

What the hell are you talking about?

What does your mind think is 'disgusting' about this turn of events?

Seriously, what are you talking about here?

Just taking a stab in the dark here, but I'm pretty sure they were referring to the way the employees were treated and kept in the dark, then unceremoniously dumped with no warning.

There was also all that crap with the moving expenses. They offered to pay all the relocation costs for new employees. However, 38 Studios apparently never paid the moving companies and instead just stalled them for months. With 38 Studios going into bankruptcy the moving companies went after the employees directly. The employees thought that all those bills were taken care of almost a year ago.

Apparently 38 Studios also offered to handle the sale of the employees' old houses and pay off any outstanding mortgages from the proceeds of the sale. Once again they did nothing and now the employees find out that with the company gone bankrupt they are once again responsible for the mortgages and all the payments 38 Studios missed.

They also did not inform the employees that their employee health insurance was gonna be canceled because 38 Studios was not paying any premiums to the insurance company for months. They found out when a pregnant woman was told by her doctor that she no longer had insurance.

veloper:
For some reason, whenever I hear the name Curt Schilling I imagine Homestar Runner.

Did he never get into the concept of limited liability?

Apparently Shilling was very good in personally wooing investors. They were investing because of him and thus wanted a personal guarantee.

Mental note: Don't start a business in Rhode Island.

Sober Thal:
Seriously guys, these articles are fucking screaming for some baseball jokes...

On a serious note... I feel bad for the people Schilling employed, not him.

http://content.usatoday.com/sportsdata/baseball/mlb/salaries/player/Curt-Schilling

Holy!

This guy could fund this project several times over with one year of his baseball salary. Yeah I'm not feeling bad for him anymore. This just proves he was stupid with his money and stupid with his business.

It's no use. Curt Schilling hasn't got a...SHILLING!

Sober Thal:

Fiz_The_Toaster:

The shit behind the scenes was disgusting, and I really hope that kinda shit never happens again (although that might be wishful thinking on my part).

Sorry, I just have to ask...

What the hell are you talking about?

What does your mind think is 'disgusting' about this turn of events?

Seriously, what are you talking about here?

I was responding to someone about the behind the scenes stuff and what happened to the employees of the studio.

The stuff that's happening to him isn't and he did have it coming since he obviously has no idea what he's doing.

Sober Thal:
Seriously guys, these articles are fucking screaming for some baseball jokes...

On a serious note... I feel bad for the people Schilling employed, not him.

http://content.usatoday.com/sportsdata/baseball/mlb/salaries/player/Curt-Schilling

Seriously, I wonder just how much of his own personal money he invested in 38.

I have a feeling all his personal wealth went toward it, with whatever being left not being enough to pay off these debts.

But that's just an assumption, who knows. This is getting nasty in any case, but I can only echo what many people have already said - they shouldn't have started out by making a triple A title.

This is turning into quite the shitstorm. I feel bad for the employees, especially. There's getting screwed, and then there's this.

Just curious here, because I know jack about how businesses work: if I should buy KoA at this point, would that still benefit the developers in any way?

 Pages 1 2 NEXT

Reply to Thread

Log in or Register to Comment
Have an account? Login below:
With Facebook:Login With Facebook
or
Username:  
Password:  
  
Not registered? To sign up for an account with The Escapist:
Register With Facebook
Register With Facebook
or
Register for a free account here