BOSTON/NEW YORK (Reuters) - 38 Studios, the video game company run by former Red Sox baseball great Curt Schilling, declared bankruptcy on Thursday, weeks after laying off most of its staff and having its funding cut by the state of Rhode Island, which had been its major financial benefactor.
The filing for Chapter 7 bankruptcy protection was made in U.S. Bankruptcy Court in Delaware.
In the filing, on behalf of 38 Studios LLC and three associated entities, the company listed $21.7 million in assets, mostly personal property, and $150.7 million in liabilities.
'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,' the company said in a statement.
Separately, the Providence Journal reported that the Rhode Island State Police and other law enforcement agencies, including the FBI, have launched an investigation into 38 Studios.
A spokeswoman for Steven O'Donnell, superintendent of the state police, had no official comment.
Officials from 38 Studios did not respond to calls and emails for additional comments.
Schilling's company received a $75 million taxpayer-backed loan guarantee from Rhode Island in 2010, as an incentive to move its headquarters to Providence from Maynard, Massachusetts.
It had received almost $50 million of those funds through late May, the state has said.
In May, 38 Studios was more than two weeks late on a $1.4 million loan repayment to the state and failed to make payroll.
Rhode Island Governor Lincoln Chafee, who opposed the 38 Studios deal when he ran for office in 2010, will hold a press conference in Providence at 4 p.m. EDT on Thursday to discuss the developments.
Schilling, a New England sports hero who helped bring a World Series championship back to Boston in 2004 and has been a prominent backer of conservative politicians, has avoided talking to the media in recent weeks.
He has at times taken to Facebook to praise the 'resilience' of his company, but was silent on Thursday.
The company's liquidation could leave Rhode Island holding the collateral pledged against 38 Studios' loan, including the current and future rights to 'Kingdoms of Amalur: Reckoning,' a video game launched in February, and those to an elaborate, multi-player game code-named 'Project Copernicus,' which recently had a tentative release date of 2013.
(Reporting by Ros Krasny in Boston and Jonathan Stempel in New York; Editing by David Gregorio and Maureen Bavdek)
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