Friday, June 15, 2012

Bank sues 38 Studios co-founder over loan debt

The tragic tale of 38 Studios just keeps getting worse. On top of the developer declaring bankruptcy and an employee's wife revealing details about the company's last days, co-founder Curt Schilling is being sued by Citizen's Bank to recover millions of dollars in loans he guaranteed for the studio.

Although the Providence, RI-based bank has little chance of collecting any money from 38 Studios, the bank said that Schilling personally vouched for a $2.4 million loan for the company, and they are suing him to get it back, according to a report in the Boston Globe. "Schilling has failed and refused [to pay the loan]. This is a straightforward matter of liability," the bank said in its suit.

Court documents show that the $2.4 million roughly breaks down to a $2.06 million line of credit from October 2010 and a 38 Studios' credit card account with a $375,596 balance as of June 7.

The Globe said Schilling guaranteed other loans for the company, including a $1.5 million line of credit from Middlesex Savings Bank, and a loan for an unspecified amount from Bank Rhode Island, in which Schilling used a personal gold coin collection as collateral.

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