EDC plan to sell 38 Studios assets OK'd

PROVIDENCE, R.I. (WPRI) – A Delaware bankruptcy court judge on Wednesday approved the R.I. Economic Development Corporation’s request to allow it to sell off bankrupt game company 38 Studios’ assets back here in Rhode Island.

U.S. Bankruptcy Judge Mary Walrath granted the EDC’s motion for relief during a hearing at federal court in Wilmington, Del., according to agency spokeswoman Judy Chong. A local attorney attended the hearing on the agency’s behalf.

“What this means is that we can move forward to appoint a receiver here in Rhode Island to oversee the sale of the assets here in Rhode Island,” Chong told WPRI.com.

EDC attorneys filed petitions late Wednesday in Rhode Island Superior Court seeking appointment of a receiver for 38 Studios, citing "the complexity of the issues and non-routine nature of this matter."

38 Studios and its three subsidiaries filed for bankruptcy on June 7 after running out of cash, less than two years after Curt Schilling agreed to move the company to Providence in exchange for a $75 million taxpayer-guaranteed loan from the EDC.

In a court filing last month, the Delaware trustee overseeing 38 Studios' liquidation said  he had tried “to no avail” to convince the EDC to let him sell the leftover equipment.

“The RIEDC has expressed its intent to seek the appointment of a receiver in Rhode Island to liquidate its collateral outside these chapter 7 proceedings,” the trustee, Jeoffrey Burtch, wrote in the filing.

Ted Nesi ( tnesi@wpri.com ) covers politics and the economy for WPRI.com and writes the Nesi's Notes blog . Follow him on Twitter: @tednesi

Tim White contributed to this report.