In the latest twist in the long running 38 Studios saga court documents have alleged that executives at the defunct studio knew loans from Rhode Island wouldn't be enough to cover development costs for MMO Project Copernicus.
Emails from studio vice chairman Thomas Zaccagnino have been submitted to the court revealling that 38 was aware that loans they accepted from the Rhode Island Economic Development Corporation (EDC) would not be enough.
WRPI reports Zaccagnino sent the emails in response to then CEO Jen Maciean's umbridge at plans to tell Rhode Island officials that the loans would suffice for the development and completion of Project Copernicus.
Zaccagnino commented:
“I really do not think we should highlight the fact that we might be under capitalized…won't go over well with the staff or board.”
The State of Rhode Island's ongoing legal battles against former executives at 38 Studios and EDC alleges that those involved "knew or should have known, but failed to inform the EDC Board, that 38 Studios was destined to fail according to 38 Studios’ own financial projections," as such, these emails could have an important impact on the case.
Former EDC board member Donna Cupelo swore an affidavit before the court in 2012 stating she was led to believe the studio would have enough money to complete the deal if the loans were approved.
Cupelo also said she was assured 38 Studios would have a positive cash flow of $12 million in 2012, the year it collapsed.
The legal team representing former EDC executive director Keith Stokes, another defendant, told the court last year that the EDC board was actually "acutely aware that the capital needs of 38 Studios where [sic] in excess of $125MM as acknowledged in the 2010 EDC Inducement Resolution."
The case is expected to go to trial but a date has not yet been set.
