38 Studios Lands Former Employees with Second Mortgages?

96
Lee Bradley

Yesterday, hundreds of staff from the beleaguered studio behind Kingdoms of Amalur: Reckoning were laid off. Today, if the latest reports are to be believed, things have got much, much worse.

Apparently, some of the employees from ex-baseball star Curt Schilling’s 38 Studios have been informed by banks that the homes they thought had been sold to the company have remained in their name. 

That means that not only have they lost their job, they’re also unknowingly defaulting on a mortgage they were assured they no longer had. Unpaid mortgages can lead to personal bankruptcy and homelessness. 

It’s being speculated that those involved with 38 Studios’ relocation program are the victims. While moving from Massachusetts to Rhode Island, 38 Studios offered to buy their employee’s old homes to make the process of relocation a little quicker and easier. Except it would seem that didn’t happen.

Or, at least, it didn’t happen in the way that employees had been led to believe. Instead it’s being suggested that 38 Studios did not buy the homes from those employees at all.

While much of the story is yet to be fleshed out, Polygon are claiming that “several sources” have confirmed that they’ve received massages from their banks asking why their old mortgages have not been payed.

Further questions have been raised regarding the legality of 38 Studios’ use of state money. The company has received significant investment from Rhode Island itself, money that you are not legally allowed to spend on financing homes or paying mortgages.

38 Studios are also facing accusations from Gov. Lincoln Chafee that because they didn’t alert the state ahead of time about the company’s 379 layoffs, the company is once more in default on the loan agreement with Rhode Island.

Whatever the outcome, expect this story to run for some time. It seems increasingly likely that alongside the continuing case between West/Zampella and Activision, this year’s biggest headlines will be more about courts than consoles.

Comments
96
  • ...holy shit.
  • That's quite the way to screw over your employees. Gotta be the most douchebag moment of 2012 so far. Hope those affected land on their feet again.
  • First they lose their job, now they get told there employers lied to them and screwed them over and may face bankruptcy or even their homes? wow seriously, those in charge that knew about this need to have there nuts kicked into their throat.
  • Awesome...The first player from the steroid era to go to jail isn't going to be a steroid user like Bonds or Clemens...Way to go Schilling, you d-bag. Maybe you can sell the bloody sock to a collector to make up some of this money.
  • Absolutely disgusting. Fuck Curt Schilling and 38 Studios. Hopefully something can happen that the devs won't end up homeless.
  • It might be the Yankee fan in me saying this, but Schilling is a scum bag.
  • So no more DLC?
  • thats rough
  • This is why I dont work in the video game industry
  • You should have went with "twist of fate"...
  • Wow, that's insanely rough.
  • That's horrendous.........I know American law is different but under English law at least those mortgages would be void for fraud so there might be some hope for the employees at least
  • "they’ve received massages from their banks" Well at least they've gotten a nice rubdown after all of this.
  • Move over EA there's a new face of evil in the gaming world!
  • Cannot believe I'm reading this, I mean its bad to lose your job, but your home as well... its so unfair. I hope they all find something soon, it's just so bad that somebody has to go though something like this. :(
  • @13 I'm glad I wasn't the only one who caught that lol
  • Curt Shilling should be ashamed of himself. He is worth 100 million or more and is letting the state's taxpayers foot the bill. Asshole.
  • Cannot be said better than #1. I thought exactly that. How disturbingly sad :/
  • This might be the Red Sox fan in me saying this, but Curt Schilling is a douchebag.
  • @14 lol, 38 Studios is probably in cahoots with EA since Kingdom of Amalur Reckoning was published by EA.
  • "Unpaid mortgages can lead to personal bankruptcy and homelessness." In fairness, this statement is a bit exaggerated. Especially in today's housing market, the magically "reappearing" mortgages will likely "only" lead to a massive hit to the ex-employees' credit ratings and a drawn-out foreclosure. You're not going to see former 38 Studio devs sleeping under bridges as a result of THIS. However, when you factor in the insult to the injury of not being paid back wages, you might have a different financial disaster on your hands.
  • This is terrible. What a shame. If I was one of those employees I'd be pissed right now...
  • Wow, my friend moved up there 2 years ago to work for them, they bought his house, thank god he found a house to rent.
  • that sucks, this is the economy now, we are all fucked...
  • Some lawyers will be making a lot of money off this from all the lawsuits.
  • @13 For real, I wish my bank did that! Lol at the picture of Curt Schilling at the end smiling at us. Curt Schilling for the Biggest Douche in the Universe 2012!
  • As someone who has lived in Warwick, RI his whole life, I can tell you Rhode Island is the center of corruption in the US. You'd be better off moving to Bosnia than Rhode Island.
  • Geez... is there a way we can buy the game and the DLC, and make certain ALL the profits go to the employees, and NONE of it to Curt Schilling?!
  • This is an atrocious way to treat employees! I can't believe how badly they've been screwed over! My heart goes out to them and I really hope they land on their feet!
  • Am I the only one wondering what kind of a massage a bank gives?
  • Don't worry everyone. Curt is rich, he'll be fine. The 400 people who just lost their jobs and homes though... Isn't it a great country we live in today?
  • Way to really fuck your employees over. I predict a huge lawsuit against Schilling and the other financial backers of 38 studios.
  • It's bad enough that people take a big risk in is economy and pull this type of stunt.
  • Wow. The idiots running this company (read: Curt Schilling and whoever else.) need to get fucking beaten with a stick. It's one thing to ruin your own life on a gamble. It's another thing to do it to every single person in your employ.
  • And as odd as it may sound... Hopefully EA will come to the rescue and give some of these poor schmucks a place to work.
  • And this is why you visit a Fateweaver before taking an out of town job.
  • "they’ve received massages from their banks" Wish my bank was that awesome.
  • EA to the rescue? Since they're considered the most evil company in the US this'll be a pretty good PR move for them.
  • Has Schilling made any statements? He's uncharacteristically quiet.
  • I hope Curt Schilling goes to prison (:
  • If you've followed baseball and the MLB like I have you would have known long ago that Curt Schilling is a looney Right Wing nutjob
  • And suddenly modern economics are terrifying. :x
  • I, for one, can say I'll be happy when I hear about how Schilling got stabbed in the fucking throat and bled to death. I'd be more humane, if he'd be less of a fucking cockroach.
  • That sucks, sad thing is Curt Schilling will sail off into the sunset scot free because of the money from baseball.
  • Is this the Hope & Change us Americans were promised?
  • Unfortunately, Shit rolls downhill.
  • What pricks!
  • what a set of bastards, and the award for most corrupt studio is..... Surely the employees have some legal protection as the Studio 'agreed' to buy their homes, they should therefore be liable. Absolute joke of a company!
  • what a douche!
  • wow... I have no idea what to say... I didn't know you could get massages at the bank =p but seriously that's bad....
  • This is why th global evonomy collapsed because of sheister companies like this, those mortgages will now default and the banks will lose millions etc etc capitalism ey
  • Jeez...sounds like a quick exit for this studio. Too bad, they had potential.
  • This might be because i'm not a sports fan, but Curt Schilling is a douchebag.
  • He needs to choke on his own ballsack
  • bunch of cunts!
  • I hope they all get together hire an ace lawfirm and kick that guys ass.
  • I hope they got signed contracts for that. And I hope they all find jobs. Even more so, I hope they find a law firm willing to go to bat and take evey penny from that corrupt fuck. I had no problem with him getting involved in gaming since it seemed to come from a place of love, but there is a reason positions like CFO exist: to prevent dumb tucks like him from running a company into the ground. Way to go Schilling. I hope lining your pockets was worth the ruined lives.
  • Did Schilling just make Bobby Kotick look like the 2nd most evil person in the world? I didn't think that was even possible...
  • Whilst this is certainly a shitter for the employees involved they should really have either confirmed the details personally or had some legal rep look into the matter at the time. You don't just take an assurance that everythings sorted on such a matter.
  • why do i have the feeling this guy is hideing cash because he knows 38 studios is going to fail witch means he can take 10 mill out of the bank once this is all said and done and the state takes the studio.
  • I hate to see 38 in such a situation because of KoA is any indication they have alot of potential to be something great. Unfortunately if this information is to be taken at face value it seems that there are significant shenanigans going on with there financial and legal departments that may have sunk the studio permanently.
  • If 38 studios goes away, what happens to the production of this game? May be worth something one day due to so few copies floating around.
  • Geeze man, I thought my company fucks me over. Mediocre game, illegal use of money and questionable practices.... hey EA here is a new company to join your evil empire, they would fit right in.
  • I feel bad for not buying the DLC now :/ is it too late to save them I could get it now
  • @35: I think that term you're looking for is schlimazel, someone prone to extremely bad luck. Schmuck just means idiot. @7: That was my first thought!
  • "38 Studios offered to buy their employee’s old homes to make the process of relocation a little quicker and easier. Except it would seem that didn’t happen". I think I would have noticed if somebody DIDN'T buy my house.
  • Why do they post a picture of Curt Schilling at the bottom of the article? So people can pick him out of a crowd to assault him maybe?
  • I feel bad for these people losing their jobs, but they didn't know they still owned their old homes or not? Were they not present for all the paperwork that has to be done to transfer ownership of the home/property? How long were these people working on the game after moving? It took that long for the bank to let them know they were behind on payments? I doubt it. I could miss 2 payments at most before I started receiving constant calls/letters from the lender looking for their money. I don't know what deal the studio had with them regarding their homes, but regardless, they should have recognized any issues a long time ago, not coincedentally after they get laid off. Sucks that it happened and I hope they get it worked out, but you have to be better about taking care of those type of things and not assume it's handled properly.
  • Lee, are you going to cut and paste this story on your other website?
  • lol this is the same guy who acted high and mighty about the steroid scandal, nice to see he holds the same morals when it comes to real life.
  • Everybody has the same dull and predictable victim responses. Huge props to comment #68 Preedatore for being one of the very few to actually think about the issue.
  • That sucks big time. I personally enjoy KoA. Recently bought game then DLC. This also means they won't fix the Dead Kel DLC bug where you get stuck and can't fast travel or anything... Which happened to me.
  • What's sad is the game is enjoyable and shows a lot of promise for ideas that if fleshed out properly could provide an even better RPG experience. The developers clearly had a lot of talent and passion for what they were doing. This whole mess is sad and disgusting. I wish them all the best.
  • @68 If the company changed the mailing address, then they wouldn't ever get any letters. They could of also asked the employees to have them list 38 studios as the number to call, or given a fake number.
  • Capitalism yay
  • lol @ the 1 or 2 anti-Democrat remarks on this page. Curt Schilling is a diehard rightwinger if I ever met one. He seemingly graduated from the "John Wayne Celebrity School of Politics" at the head of his class. Now, political differences aside, you can't lay 100% of the blame on Curt Schilling. Surely their accountants, the analyst and even the banks themselves saw significant risk in the whole KoA venture. Read the details more closely, people. According to articles from various sources that I've read, KoA: Reckoning had to sell roughly 3,000,000 copies just to break even from the project and pay off their debtors. That, clearly, did 'not' happen. According to vgchartz, it's sold 570,000 copies on the 360, 400,000 copies on the PS3 and 160,000 copies on the PC. They 'barely' broke the 1million mark. That being said, if the 3mill rumors are true, they only got enough to pay off 33% of their debts from their first game. You know retailers get their chunk of the profit, so assume that 38 Studios received....$45 per copy sold. That's just over $45,000,000. That leaves roughly another 90-100 million they still owe. That's a big fucking budget game right there. My question is, who in their right mind would approve such a venture in the first place. EA and Activision rarely spend out that much on their own games, let alone a third-party entry. I spell a serious corruption scandal brewing here, because while I thoroughly enjoyed KoA and its DLCs, there is no way in hell I would believe that that's a $100,000,000+ game. No fucking way.
  • I would absolutely love it is my bank gave me massages.....
  • After reading some of the articles online, it seems like the employees decided to make some extra trouble for Kurt Schilling, and 38 Studios, in the press. I am in no way refuting the claims that were made in this article, but it seems just a little fishy to me: 1. The employees were not informed of their layoff until the day it happened, there was no apparent sign of trouble until everything went south. 2. 38 Studios has reportedly not paid their employees for the past month of work (yet another thing that would piss off employees, and could definitely impact them financially.) 3. All of these employees, who no longer work for 38 Studios, and should have no reason to withhold their names, are refusing to be quoted on the issue. 4. And finally, as #68 has said, how could you just "not know" that your house was never sold.
  • and for #74 would you truly have me believe that if someone told you they had completed, at the very lowest end, a $50,000 transaction in your name, you would make no effort whatsoever to verify the truth of such a statement? Would you not take the check to the bank, and try to deposit it? Would you not call the bank you had your first mortgage with, and make 100% sure everything was fine and dandy? Of course you would. If I told you that I had paid your rent/mortgage for the next two years, would you take me at my word? Of course not. I do feel for the employees of 38 Studios, this is a very shitty way to lose a job, but people maybe need to pay a bit more attention to the world around them from time to time if all of these allegations are, in fact, true.
  • If 38 Studios was withholding that information from its employees, then it only makes sense that when 38 Studios stopped employing them, they'd stop withholding that information. Mortgage notices would presumably be sent to 38, where they were just ignored, until 38 decided to drop this bomb on their former employees. A nice severance package, don't you think? @Arumi - I dunno about not withholding names. I wouldn't like it if my name was plastered all over the internet next to the words "homeless" and "didn't pay mortgage." That's not exactly the kind of thing one likes getting around, so these people withholding their names makes perfect sense. And no, I wouldn't take you at your word about paying my rent or mortgage, but then, you're not my employer, you didn't give me a job, or make me sign a job contract. They put a certain measure of trust in this guy, and he royally screwed them. Regardless of why they didn't know, the fact remains, the dude screwed them sideways. Whatever blame you wanna put on the ex-38 employees, it's not even a fraction of what's going on this asshole's head.
  • Must be good banks, offering massages to them.
  • @79 Some people are trustworthy like that. Besides if it was someone like Curt Schilling (World Series MVP, Savoir of the Boston Red Sox) you tend to trust people like that. It's nice that you would of seen right though this, but some people aren't as sharp as you.
  • 38 studio really tarnish the reputation of the game industry.
  • Sucks that jobs were lost, but am I really supposed to believe that NO ONE on staff did a credit check to make sure that their mortgages was off the books? Everyone gets a free one every year (in most states anyway) so there is really no excuse. At least half the blame on this one is squarely on the employees.
  • That is seriously rough. Completely screwing over your former employees to the point of almost ruining them. If any of them end up homeless it'll be a damn shame.
  • Wow!
  • Curt, you're a douche..
  • Anyone who is blaming the victims in this is an ass. If a company screws an employee, the company is to blame. If a man rapes a woman, he is to blame not what she's wearing. If a person shoots another person, the shooter is to blame not the gun. To blame anyone other than 38 Studios in this is irresponsibly misdirecting blame. Only idiots who need to simplify everything in order for their brains to understand it will make this about politics. What I find interesting is the lack of ESPN coverage of this. I watch ESPN and ESPNEWS constantly. I have not seen any mention of it. I do remember Schilling promoting the game pre-release on some shows though...
  • @88: http://espn.go.com/boston/mlb/story/_/id/7972909/rhode-island-governor-says-curt-schilling-company-again-violation There ya go! lol
  • Wow...just wow. Seems like nothing is going right for those employees, or rather former employees. I hope they can bounce back from all this.
  • @88 They briefly mentioned it on Sportscenter and it was talked about for 5-10 minutes on Mike and Mike in the morning (espn radio). So yes they have talked about it.
  • i dont care who you work for , if you "sell" your house to the company you work for and dont check to see if it was all done correctly then you are an absolute idiot.
  • This might be because I'm a human being, but Curt Schilling is a douchebag. While I feel bad for the employees, and my first thought was to wonder how they couldn't have known about the mortgage problem, I would imagine that at least some of those affected DID know there was a problem. But what can they really do about it but ask their employer what happened? I'd guess that 38 continued to blow smoke and assure them there was a mistake and they'd fix it - right up until they laid them off.
  • One thing is missinh from the Curt Schilling picture. The red sniper dot!
  • Payed? Really? I thought this site was fucking English!
  • @78 Further to your comment, and maybe it's different down there, but my mortgage comes directly out of my bank account. Now, unless these employees closed these accounts and opened up new ones upon moving to RI, how would the mortgages not have been paid each month/semi-monthly, whatever? Surprisingly enough, how the hell would these people have gotten another mortgage if their first house weren't sold, yet another indication something fishy was going on...oh wait isn't that a huge part of the reason the US economy tanked? Good to see the banks got the message the first time around :/ So as much as it sucks for these employees, I can't feel too bad for them considering they did no due diligence to ensure things were on the straight and arrow when they packed up to RI. Now, what else is stopping them from selling in RI and moving back, they still have a place...unless the bank has foreclosed the property with these mortgage payments all of a sudden ceasing, for no apparent reason. Lawyers would have also been facilitating transactions with employee and the studio. I just can't pity stupidity.
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