This should come as no shock to anyone that has been following the saga between the state of Rhode Island and bankrupt game development house 38 Studios: the state of Rhode Island has decided that it will sell off the studios' assets (which it now owns) to pay down some of the deficit it was left with after 38 Studios went bankrupt.

According to WPRI, Rhode Island Governor Lincoln Chafee (I) is taking sides in a fight over the future direction of the state’s troubled Economic Development Corporation. The fight is between former campaign rival and Moderate Party Chairman Ken Block and House Speaker Gordon Fox, but the Governor has decided to go against the Speaker and side with Block.

In an extensive New York Times article on the demise of former Red Sox all-star pitcher Curt Schilling's 38 Studios, current Rhode Island governor Lincoln Chafee (I) shares his thoughts on what led to the studio defaulting on a $75 million loan from the state and the studio's eventual bankruptcy.

The Boston Herald is reporting that lawmakers in Rhode Island are saying that they should stop making payments related to 38 Studios loan. The state is currently suing founder Curt Schilling and executives from the company that defaulted on loans in the neighborhood of $100 million. The Rhode Island House Finance Committee is currently reviewing bills that would block the state or its Economic Development Corp. (EDC) from making payments.

Rhode Island Superior Court documents unearthed by The Providence Journal claim that the management at the now-defunct 38 Studios knew they didn't have enough money to finish projects before moving to the Ocean State. At least that is what the state is alleging in its case against the company who took a loan for millions of dollars and then defaulted on the loan.

The Associated Press is reporting that 38 Studios founder and former Red Sox pitcher Curt Schilling has asked a Rhode Island superior court judge to throw out a lawsuit filed by the Rhode Island Economic Development Corporation.

You can't get blood from a stone, but the state of Rhode Island is going to try anyway. The state announced today that it has filed a lawsuit against Curt Schilling and various executives at the now bankrupt 38 Studios in an attempt to recoup the $75 million loan guarantee given to the studio to set up shop in Providence and create an MMO.

According to the Associated Press, there will be no federal criminal charges filed against Curt Schilling or his now bankrupt game development company 38 Studios. A spokesperson for U.S. attorney spokesperson Peter Neronha told The Associated Press that the office has conducted a "narrow and focused" examination of 38 Studios to find out if any federal laws had been broken, and has decided to not continue the investigation. The federal level investigation into 38 Studios began in June, shortly after it filed for bankruptcy.

The state of Rhode Island is auctioning off the remaining physical assets of 38 Studios including its computers, office furniture, audio equipment, consoles, televisions, conference call equipment, office telephones, security equipment and more. The assets are being sold off by auction site SJ Corio Company. The assets will be sold off in two different auctions: one to take place in Rhode Island on October 12 and another on October 23 in Maryland.

The ghost of 38 Studios' unpaid loans and bankruptcy still haunt the state of Rhode Island, according to comments made by current Governor Lincoln Chafee (I). The governor said that the 38 Studios failure "remains an economic development crisis" for the state.

The ghost of 38 Studios is haunting Rhode Island politicians who are trying to get reelected. Speaking to the Associated Press both incumbents trying to hold on to their respective public offices and challengers who want to take their places next year are saying that they are having to answer a lot of questions from voters about the $75 million loan guarantee given to Curt Schilling's 38 Studios by Rhode Island.

I wonder how the citizens of Rhode Island feel about free-to-play games... Ultimately their opinion is of paramount importance now that the state owns the rights to Curt Schilling's first MMO project, Copernicus. So what does free-to-play have to do with it? Well, apparently the plan for 38 Studios' first MMO was to launch it as a free-to-play game, according to Boston Magazine. At least that is what Schilling told the publication...

The Rhode Island Economic Development Corp. and Bank of New York Mellon Trust Co. are now the proud (?) owners of the game assets of 38 Studios. While we doubt the state of Rhode Island will be releasing Kingdoms of Amular 2 or Copernicus anytime soon, we can expect that they will offer the assets for both of those franchises up for sale at some point in the not-too-distant future.

A nine-page article in Boston Magazine takes an in-depth look at why former Red Sox pitcher Curt Schilling's company 38 Studios failed and offers the first glimpse inside that company's studio structure, the dysfunction of management, Schilling's opinion on the Kingdoms of Amalur MMO Copernicus, and details on a publishing deal that Schilling claims was almost finalized.

The Economic Development Corporation of Rhode Island finds itself highly dysfunctional in the wake of 38 Studios going bankrupt and not being able to meet its obligations related to $75 million loan. The pseudo government-corporate entity has been without an executive director since May when Keith Stokes decided to resign over the loan to 38 Studios. Today we have learned from several published reports that another loan the EDC approved is not going to be paid back and that another executive has resigned.

Speaking to sports radio station WEEI, former Red Sox pitcher and founder of the now bankrupt 38 Studios Curt Schilling said that he is "tapped out" after his company filed for bankruptcy. Schilling said that he lost $50 million of his own money and is personally responsible for paying back a $2.4 million loan from Citizens Bank parent RBS Citizens.

Rhode Island state and Federal officials have begun to dig into the affairs of Curt Schilling's 38 Studios, who filed for bankruptcy earlier this month. According to Gamasutra, information related to the loans given by the state to 38 Studios is about to be picked apart. Earlier this month the Rhode Island State Police, the Rhode Island Attorney General's office, the FBI, and the U.S.

The Providence Journal is reporting that 38 Studios has filed for bankruptcy today and that a series of investigations into the company by state and federal agencies are incoming.

A number of stories have popped up over the holiday weekend relating to 38 Studios and its continuing struggle to stay alive. Among them is news that an update to Kingdoms of Amalur: Reckoning will not see the light of day, that a sequel to the game was already in pre-production and fresh comments from several high profile 38 Studios executives taking Rhode Island Governor Lincoln Chafee (I) to task for throwing the company under the bus in the name of what they see as demagoguery.

According to this Joystiq report 38 Studios has laid off its entire staff across both its Providence, Rhode Island studio and its Bug Huge Games studio in Baltimore, Maryland. An internal memo obtained by news station WPRI reveals the details of the layoff and how employees received the news. The memo reads:

Five Rhode Island lawmakers have issued a public rebuke of a letter from Rhode Island Statewide Coalition chairperson Harriet Lloyd. Lloyd's letter said that lawmakers who expressed dismay over the current trouble concerning the state and Curt Schilling's 38 Studios were being disingenuous and that their support for the Job Creation Guaranty Program gave the Rhode Island Economic Development Corporation carte blanche to spend the $75 million given to the untested game company.

38 Studios has let some of its staff go, according to Rhode Island Governor Lincoln Chaffee (I), though how many people we do not know at this point. Chaffee made his comments to the media after a lengthy meeting with the Rhode Island Economic Development Committee and 38 Studios founder Curt Schilling. After the meeting Schilling had no comment for the press, save that his company would not be looking to Rhode Island taxpayers for help.

Things are going from bad to worse for 38 Studios and its employees. On Thursday a company representative hand-delivered a check for the $1.1 million payment that was due on May 1 to the Rhode Island Economic Development Corporation, but the company then said that it didn't have the money in the bank to cover the check. If a private citizen wrote such a check they would be under arrest and enjoying the amenities of a Rhode Island jail without bail, but that's another story altogether.

Residents of Rhode Island can take solace in the fact that if 38 Studios were to fail today it would own the rights to the studios' current and future intellectual properties: Kingdoms of Amalur: Reckoning and its MMO "Project Copernicus." All future revenues from both titles would also go towards paying down the debt too - you know, the $75 million bond plus the interest through 2020.

Update: A Boston Globe report indicates that 38 Studios founder and former Red Sox pitcher Curt Schilling has asked Rhode Island officials for more money for his company in the private meeting that was held this morning. The newspaper says that board members of the Rhode Island Economic Development Corporation took no action on Schilling’s request. The amount he asked for was not disclosed.

Former Red Sox pitcher Curt Schilling is probably not having a good week. The studio he founded, 38 Studios, is having serious financial trouble according to several news reports coming out of Rhode Island, and the state is doing what it can to protect the estimated $75 million in investments it spent to lure the studio away from Massachusetts.

Speaking to Joystiq, former Red Sox pitcher and current CEO of 38 Studios Curt Schilling talked a bit about his company's growth over the last year and his decision to move his studio from Massachusetts to Rhode Island. Schilling said that the company's 150 - 160 employees are already in the process of moving to the brand new facility in Rhode Island.

"The team is incredibly excited. It's our building! We have all six floors -- it's our studio and we're alone. It's our space," Schilling told Joystiq at an EA GDC event. "Gavin -- the studio GM -- and I, we really took a Disney approach. There's no detail too small for us in the new studio to make it a place where people walk in and say, 'I wanna work there.'"

While reading a eulogy of sorts on the career of Rhode Island state representative Steven Costantino, I could not help but notice that his handling of the 38 Studios deal must not have helped him much in his bid to become mayor of Providence. Costantino failed to win the fight earlier this month, and has decided to walk away from state politics... for now.

While sifting through an article on the Providence Journal, the soon-to-be former House Finance Committee chairperson took some heat for the deal that war part of a $125-million state Economic Development Corporation loan. Here is a snippet from the article on that:

Never one to shy away from an open microphone, 38 Studios head Curt Schilling recently outlined an extremely confident vision for his company in Rhode Island at a Providence Business News’ Business Excellence Awards event.

Schilling, recipient of a $75 million loan from the state as a lure to move his company from Massachusetts to the Ocean State, offered, “My word on this: four to five to six years from now, we’re going to be looking back on this, and I know that 38 Studios will be one of the companies that will push and incentivize the Providence business community to become a national and global force.”

Curt Schilling’s 38 Studios has received an initial payment of $13 million from the Rhode Island Economic Development Corporation (EDC) as part of a $75 million bond deal put together to lure the developer from Massachusetts to the Ocean State.

38 Studios is slated to receive approximately $51 million in all, with $20 million held in reserve in order to guarantee three years worth of repayments on the debt. Schilling’s firm will receive the rest of the money over the next 15 months as it meets certain milestones.