State Police, Attorney General, U.S. Attorney Investigating Bankrupt 38 Studios

Kingdoms of Amalur: Reckoning wasn't a terrible game but the demise of its developer has left a terrible mark.

Bloomberg states that on Thursday June 8th, "38 Studios LLC, the video-game maker founded by former Boston Red Sox pitcher Curt Schilling, filed for bankruptcy after firing employees in Rhode Island, and officials said the company is the subject of a federal probe." But where's the money gone?

The state police in Rhode Island, the Rhode Island Attorney General and the U.S. Attorney in Rhode Island are, according to Colonel Steven O'Donnell, the state police superintendent, "conducting an investigation into where the money went."

What kind of money goes into making a video game, or rather attracting a video game maker to your state in order to make a video game? Here's how much:

- 38 Studios "with help from $75 million in state government bonds."
- 38 Studios "owes creditors about $150.7 million."
- According to the filing in U.S. Bankruptcy Court in Wilmington, Delaware the company's assets total $21.7 million.
- "Curt Schilling moved 38 Studios from Massachusetts to Rhode Island after securing cash from the bonds through the state's economic-development agency." This meant that the company received about $49.5 million.
- The company owes the agency about $115.9 million, according to court papers.

The company has, however,"pledged its video-game assets, patents, software and other property as collateral" to repay debts to the state.

38 Studio's next bond payment of $2.6 million is due November 1st.

Tax breaks and incentives are not the magic they appear to be if your company is run like 38 Studios.

Via SFGate