Schilling 'tapped out' of money after 38 Studios folds

Schilling 'tapped out' of money after 38 Studios folds
June 22, 2012, 3:15 pm
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Curt Schilling is "tapped out".

This we know after hearing Schilling on WEEI's Dennis and Callahan Show Friday morning, where he touched upon just about everything regarding his failed video game company, 38 Studios, for the first time since filing Chapter 7 bankruptcy roughly two weeks ago.

"I put everything in my name in this company," Schilling said on air. "I believed in it. I believed in what we had built. I never took a penny from this company. I never took a penny in salary, I never took a penny for anything."

And unfortunately, he never made a penny either, personally spending "just north of 50 million".

Schilling's company failed to make a loan payment to the state of Rhode Island in May, prompting its quick downfall. The public announcement by Rhode Island Governor Lincoln Chafee that he was trying to keep the company "solvent" was all it took.

The employees got blindsided," Schilling confessed. "One of the many, many mistakes I think that was made or that I made, or that we made as a leadership team was that this came out of nowhere for them. In all honesty, they found out because Gov. Chafee made a comment on Monday night about 7 oclock, a public comment which neither side had ever publicly commented on anything we were doing and it was based around keeping the company, he used the word solvent. That word, it was an enormous problem immediate for us.

"But the employees had no idea. Payday was the next day, and they didnt get a paycheck. And it just went downhill from there. The employees got blindsided. They didnt deserve it. It was not how we ever did business. The employees were everything. That was what the company was and it was about. I always told everybody, if something were going to happen youre going to have a month or two lead time. And I bombed on that one in epic fashion.

The default letter sent to the company by the state also "blindsided" 38 studios.

"We were actually confused as to why we got it," Schilling said. "Because again, this is our partner and were trying to work together to make the company successful. They had every right to issue it, weve never argued that, but we just assumed based on the conversation that they would be more cooperative."

Schilling invested plenty of his own money. He obviously had a ton of money in loans from the city. Ultimately, the reason the company failed is because they could never get enough private funding.

We didnt raise capital," Schilling said. "We didnt get private capital. At the end of the day, when you look at all the things that we did, I put all the money I said Id put in, I guaranteed the things I guaranteed from a loan perspective, I never took a penny out, and we spent the money exactly how we defined it in all the documentation with the state. And the one thing that we always listed as a going concern, we couldnt execute and we could not raise private capital. For a litany of different reasons Im sure if you ask anybody, theyll give you one or more reasons the hard part, and probably the most painful part, for the first time in 5 12 years, we were so close. And it just didnt work out.