Video Game Business Files for Bankruptcy

38 Studios is a video game company that was started by a retired Red Sox pitcher named Curt Schilling. For the past few years, the company has been struggling to produce and sell games marketed at teenage boys, but the profit hasn't been enough to keep the business afloat. According to a Boston news source, the company has over 1,000 unpaid creditors and the government is sending investigators to look into the company's failure. Some government officials suspect that there is criminal activity associated the downfall of the business.

The Delaware court filing says that 38 Studios will file a Chapter 7 bankruptcy, meaning that it will liquidate all of its assets. Schilling says that his attempt to create a multi-player role-playing game failed and he will not be working with the company any longer. Court documents show that Schilling owes money to some of his former employees, as well as other outside sources. 38 Studios as a total $150 million in debt and their assets only total to about $22 million. That means that some of Schilling's creditors probably won't ever be repaid.

In addition, Rhode Island tax payers may lose money because the state used tax dollars to lure 38 Studios to their small state. The state guaranteed a $75 million loan to the company if they would create 450 jobs in the state. When they complied, the video game developers got the millions, which was spent almost immediately. Unfortunately, 38 Studios had to lay off their entire staff two weeks ago. Business bankruptcies like this are disappointing, but sometimes they can bring a new chapter to your life and allow you to start clean. By declaring bankruptcy, you can get rid of the raincloud of debt that is hanging over your head.

Get started today by finding a bankruptcy attorneynear you!