38 Studios backers issued subpoenas over $85m loans

38 Studios backers issued subpoenas over $85m loans
Craig Chapple

By Craig Chapple

June 14th 2012 at 10:56AM

Police investigators request records into state dealings with bankrupt developer

Subpoenas have been issued to Bank Rhode Island and the Rhode Island Ecomonic Development Corporation over their $85 million loans to the now defunct 38 Studios.

State body RIEDC issued $75m in taxpayer bonds to the Kingdoms of Amalur developer in 2010 to lure it away from its Massachusetts base.

Bank Rhode Island had also loaned $8.5m in an attempt, but neither companies are likely to see a return on its investment after the studio announced bankruptcy last week.

Police investigators have now requested records of the dealings between the companies to discover why public investment wasn’t secured and what went wrong at the studio, which has cost the jobs of at least 400 developers.

38 studios had received $49.8m of the $75m loan, according to a disclosure notice from the company, and had failed to meet its payments after entering financial difficulties.