38 Studios has officially filed for Chapter 7 bankruptcy and all of its assets will be liquidated. The company has over $150 million in debt and assets of around $21.7 million.
“After ongoing negotiations with the state of Rhode Island and potential investors and other interested parties, the company has been unable to find a solution to the current stalemate,” said Schilling spokesman Larry Solters.
Additionally, federal and state law enforcement officials confirmed the launch of a formal probe into 38 Studios and its determination to secure Rhode Island tax credits to remain afloat. “The state police, the attorney general’s office, the U.S. Attorney’s office and the FBI are opening an investigation into 38 Studios, both the money that came from the state as well as the money that came from Bank Rhode Island,” said Rhode Island State Police Col. Steven O’Donnell.
Source: WPRI.com {link no longer active}
