38 Studios' bosses knew the company was financially unstable

38 Studios' bosses knew the company was financially unstable
Aaron Lee

By Aaron Lee

May 21st 2014 at 10:33AM

Email records could prove that the Rhode Island developer's execs deliberately misled staff and investors

38 Studios vice chairman compelled other senior company insiders not to disclose the fact that money the game studio had accepted from the Rhode Island Economic Development Corporation would not be enough to finish development on the company's ambitious MMO project, Copernicus.

WPRI-12 reports that emails from former 38 Studios vice chairman Thomas Zaccagnino were submitted to the court of Rhode Island along with hundreds of other documents as part of the state’s lawsuit against key figures at that ran the studio.

“I really do not think we should highlight the fact that we might be under capitalized… wont go over well with the staff or board,” wrote Zaccagnino.

Zaccagnino sent the email to key staff members in response to an email from 38 Studios' then-CEO Jen Maclean who had expressed doubts that the total proceeds from its EDC loan would cover the full cost needed to complete development of Project Copernicus, the MMO the developer was forced to abandon after it's went into administration in 2012.

These email records are an important moment in the long-running case, as Rhode Island's ongoing lawsuit against the 38 Studios executives and state representatives rests on the issue that the defendants "knew or should have known, but failed to inform the EDC Board, that 38 Studios was destined to fail according to 38 Studios’ own financial projections".

Two years ago in 2012, former EDC board member Donna Cupelo claimed that she was led to trust that 38 Studios would have enough funds to complete Copernicus if the deal went through.

But the studio collapsed in late 2012. Since then, assets from the developer have been auctioned off and the EDC filed a lawsuit against 14 defendants, including nine of its former employees.