Ugh. 38 Studios Situation Gets Worse

[DoctorFinger]

I know, I know. You're all sort of sick of the 38 Games story by now. Trust me, no one is more tired of this story here than I. When news came yesterday that all of the nearly 400 employees at 38 Games and subsidiary Big Huge Games were terminated, I thought the story was (mostly) over. Apparently I was wrong, it's not over and it may get even worse. What's worse than losing your job? How about having a second mortgage you knew nothing about tossed in your lap with the pink slip.

This story goes back a couple years when Rhode Island first lured 38 away from their suburban Boston digs with a promise of tax breaks and that ill fated $75M loan guarantee. To help ease the transition the studio offered to help sell their Massachusetts homes. When the studio swung the axe yesterday numerous employees who thought that their former homes had been sold were informed by banks that they hadn't and they were now once again on the hook for those mortgages, on top of whatever mortgages they took out on their new homes. It appears that 38 had been paying those mortgages while realtors were attempting to sell the homes, which could explain where some of the loan money went. One of the remaining officials at 38, speaking anonymously, said they hoped to have the situation resolved soon.

I'm tempted to say that this story can't get any worse, but that may be tempting fate.

Source - Polygon

[muddi900]

That is just fucking bullshit.

[DoctorFinger]

If this is true, then we've passed the 'lawsuit' stage and are approaching the 'felony prosecution' stage. Apparently by not telling RI about the layoffs, the studio has once again defaulted on the loan agreement.

[Lint of Death]

WELL THEN I GUESS THEY CAN MOVE HOME AGAIN hooray?

[Lint of Death]

On a more serious note, what in the fucking goddamn fucking bullshit damned ninth level of fucking Hell happened?!

FUCK Rhode Island. I lived in Providence for three weeks once. Bullshit town.

[fitbabits]

Stick a fork in 38 Games, Big Huge Games and Rhode Island - they're all done.

[Ink Asylum]

Somebody get some popcorn.

[Xerxes]

Big Huge didn't move right? They are where they always were.

[Libuke]

That is pretty crazy to hear. I don't really care about the company but I feel very sorry for the employees. Hard enough to lose your job but now you also have to pay for two houses that is crazy.

[Widgetcraft]

I'm not sure how much worse this situation can get without some kind of eldritch horror being involved.

[DoctorFinger]

Originally Posted by Widgetcraft

I'm not sure how much worse this situation can get without some kind of eldritch horror being involved.

Cops go into the basement of the studio and there's an exsanguniated goat and an open portal to The Old Ones.

[Spectre-7]

No need to go supernatural. If they found a bunch of skinned coeds in the basement, that'd make the situation worse.

[inmostlight]

Originally Posted by Xerxes

Big Huge didn't move right? They are where they always were.

So far as I know, yes. Some people may have moved, but the team that made Reckoning is local to me. They're still fucked and laid off without getting their last paycheck, severance, PTO, etc. (I heard reports of people with 500+ hours of vacation time that just went poof.)

[tacitus]

This whole thing is so FUBAR'd.

[Wolvie]

Wow, that's just fucked up. And it's just feels like something that laws should protect us from. I know that's just emotion fueling my words, but still...

On a side note, Kingdoms of Amalur was fantastic. I love the game. Let's hope somebody buys the IP rights, hires the entire staff, and we get a sequel to the game and the staff at 38 studios get their financial problems ironed out and can pay the bills. And they ride off into the sunset. I can dream right?

[Deadend]

Jesus, the situation just keeps getting worse. Is the way 38 handled the move normal for companies, or is this a new thing?

I'm also agreeing with you Wolvie, the way that people can be just so utterly fucked by a company without any true recourse (as the company can cease existing) is fucked up. Maybe companies should be forced to have the money required to set off all their employees in case of things going to hell like this. As I mean, if a company doesn't have the ability to do that, they are already in dire straits.

[Xerxes]

Originally Posted by Wolvie

Wow, that's just fucked up. And it's just feels like something that laws should protect us from. I know that's just emotion fueling my words, but still...

On a side note, Kingdoms of Amalur was fantastic. I love the game. Let's hope somebody buys the IP rights, hires the entire staff, and we get a sequel to the game and the staff at 38 studios get their financial problems ironed out and can pay the bills. And they ride off into the sunset. I can dream right?

You know, I just wish alamur and big head could be reform and be reunited. It one of those franchises that can go bigger the next go round. They team had cohesion. The rest of 38, I hope land on the feet. Poor Rhode Island though.

[Ox]

Originally Posted by DoctorFinger

If this is true, then we've passed the 'lawsuit' stage and are approaching the 'felony prosecution' stage.

Which felonies are you thinking of? Fraud is the most obvious, but a criminal fraud prosecution requires intent to defraud the individual at the time the deal was made (as long as you enter the deal in good faith, your later decision to default on the agreement is non-criminal). If 38 was paying for the mortgages while trying to sell them, that hardly demonstrates an intent to extract anything of value from anyone. It's stupid, not criminal.

Originally Posted by Deadend

Jesus, the situation just keeps getting worse. Is the way 38 handled the move normal for companies, or is this a new thing?

Back in the '90s, my mother's company offered her that deal: relocate right now, and we will cover your mortgage for x number of months while we arrange to sell it. It's a very generous offer, usually only extended to high-value employees.

Maybe companies should be forced to have the money required to set off all their employees in case of things going to hell like this. As I mean, if a company doesn't have the ability to do that, they are already in dire straits.

I doubt I could name ten companies in the world that have the assets to "set off" all their employees in the event that they went into liquidation. Also, this proposal would mean no company could ever borrow money, since any creditor would have first claim on any assets before the employees would.

[DoctorFinger]

Originally Posted by Ox

Which felonies are you thinking of? Fraud is the most obvious, but a criminal fraud prosecution requires intent to defraud the individual at the time the deal was made (as long as you enter the deal in good faith, your later decision to default on the agreement is non-criminal). If 38 was paying for the mortgages while trying to sell them, that hardly demonstrates an intent to extract anything of value from anyone. It's stupid, not criminal.

From the quotes it sounds like the people getting saddled with another mortgage were told outright that their former homes had been sold. That sounds to me like it's borderline fraud.

Second, there's a question about whether the mortgage payments came out of the $75M loan. If that's the case then the lawyers Joystiq and Gamasutra spoke to say it would be fraudulent use of funds.

[muddi900]

Seriously, this is fucking bullshit.