38 Studios, former Red Sox pitcher Curt Schilling’s embattled Rhode Island-based video game company, has filed for bankruptcy protection, according to the Associated Press.
The Providence Journal reports the following statement from the company:
This action comes after several weeks when the company has reviewed, considered and received the recommendations and advice with respect to potential avenues for relief that are currently available. After ongoing negotiations with the State of Rhode Island and potential investors and other interested parties, the Company has been unable to find a solution to the current stalemate.
The ProJo also reports that the bankruptcy filing comes as state and federal authorities have launched an investigation into 38 Studios.
As we’ve reported before, Schilling moved his 38 Studios to Providence from Massachusetts in 2010 after Rhode Island offered the company a $75 million loan guarantee.
Update at 1:35 p.m.: Rhode Island State Police Col. Steven O’Donnell told WPRI.com that the investigation is examining “both the money that came from the state as well as the money that came from Bank Rhode Island.”
Bloomberg (via the Boston Globe) reports that 38 Studios filed for Chapter 7 bankruptcy, which means that an appointed trustee will liquidate the company’s assets and distribute the proceeds to creditors.
Update at 2:30 p.m.: WBUR’s Mark Degon has these details on the company’s petition for liquidation:
38 Studios lists debts of between $100 million and $500 million.
It says its assets are worth only somewhere between $10 and $50 million.