The case between 38 Studios and the state of Rhode Island has begun, with opening arguments from both sides being made this morning in Rhode Island Superior Court. Rhode Island filed a lawsuit against 38 Studios founder and former Red Sox pitcher Curt Schilling and 13 others involved in the 2010 $75 million loan in November of last year.
The state claims that the company, its top executives and former executives from the Rhode Island Economic Development Corp. (EDC) knew that the company would run out of cash by 2012 and would ultimately fail but did not inform the state.
All 14 defendants were in court today attempting to have the case dismissed. The defendants' lawyer William M. Dolan III told presiding judge Michael A. Silverstein that, "clerks don't check specious claims at the door." Rhode Island's lawyer, Max Wistow, countered by offering a claim of his own; that the state has an "avalanche" of evidence that supports its claim that 38 Studios attempted to hide its financial problems.
The state, which claims its on the hook for $130 million related to the loan and ensuing debt related to it, is also attempting to sell 38 Studios' assets to recoup some of its $130 million in debt related to the developer's bankruptcy. These assets include the Amalur intellectual property and the unfinished MMO Project Copernicus.
We will have more on this case as information becomes available.