As the failure of 38 Studios (Kingdoms of Amalur: Reckoning) unfolds, some are looking towards founder Curt Schilling for recompense. Citizens Bank filed a lawsuit against Schilling last week, alleging that he personally owes over $2.3 million to Citizens Bank. The lawsuit states that, because Schilling guaranteed 38 Studio’s debt to Citizens Bank and then subsequently “failed and refused and continues to fail and refuse” paying that debt, he is therefore individually responsible for the money owed to Citizens Bank rather than his now-defunct company.
Specifically, in the prayer for relief section of the lawsuit, the company requested the following:
That this Court enter Judgment in favor of the Plaintiff, RBS Citizens, N.A., and against the Defendant, Curt Schilling, in the principal amount of $2,394,240.40, as of June 7, 2012, plus thereafter accruing interest, late fees, costs, costs of collection, attorneys’ fees and expenses pursuant to Count III hereof[.]
Schilling stated that he could lose up to $50 million of his private wealth because of the bankruptcy of his company and the lawsuits targetting him personally.
The text of the lawsuit is embedded at the end of the article.
Analysis: So, here’s the situation. You’re a creditor who’s made a terrible investment, and now you’re trying to get money from a tanking company that owes $150 million but possesses less than $22 million in assets. This means that you’re now a part of a large, angry crowd of creditors who aren’t going to be seeing their money anytime soon. What do you do? Why, you sue the millionaire behind the mess, of course.
To be fair, Schilling did allegedly guarantee the debt personally, which blends the border between him and the company and makes it a lot harder for him to hit the eject button and escape the crashing plane. Because of that, I doubt he’s going to be able to win this lawsuit or any others of a similar ilk. He’s tied himself financially to 38 Studios, even if only partially, and because of that mistake, he won’t be able to get out while the getting’s good.
The question is, should Schilling have to pay out at least some of the fortune his company now owes to a multitude of creditors? My answer is that he definitely should. He wasted millions of dollars, a good chunk of it taxpayer dollars, on poor management. I need to remind you that his company didn’t fail because of poor sales; Kingdoms of Amalur: Reckoning sold remarkably well for a new IP. In fact, it surpassed 410,000 units sold in just two months, not counting PC sales done through digital distribution networks. For a company that’s successful to be caught owing so much money really just paints a portrait of how badly Schilling screwed over his venture into running a business. I think that really goes to show that, sometimes, just because you’re a celebrity that’s good at something doesn’t mean that you’re good at everything.