Recently, 38 Studios, a video game design company, laid off a staff of nearly 400 employees. The company, as some New Jersey residents may be aware, is headed up by former ace pitcher Curt Schilling and has been facing financial difficulty for some time. Though it is not confirmed, it appears a Chapter 7 bankruptcy filing may very well be in the company’s near future.
Of a $75 million loan awarded to the company in 2010, only $1.1 million has been repaid, and even those loan payments came several weeks late. In the case of a Chapter 7 bankruptcy, the company would be liquidated in order to repay creditors. It also appears that the company will be left to close its doors permanently if it is unable to secure additional funds to keep the company running as it was.
Rhode Island, one of two states in which the company is located, has been one of the main financial lenders to the company, and was the entity behind the $75 million loan. Originally, it was envisioned that 38 Studios would provide needed jobs to that state’s residents and would be a beneficial addition to its economy. Unfortunately, this was not the case for 38 Studios.
However, after a Chapter 7 filing, Schilling and his company may cease losing money and perhaps root themselves in a different endeavor. New Jersey residents in similar situations, whether facing a need for restructuring of obligations or a complete closure such as 38 Studios appears to be facing, may benefit from similar bankruptcy protections.
Source: Policymic.com, “Curt Schilling’s Bankrupt 38 Studios Another Example of Big Business Sucking Taxpayers Dry,” Michael Luciano, May 25, 2012