Thursday, April 24, 2014
The Associated Press
PROVIDENCE, R.I. - The online video game in the works when former Boston Red Sox pitcher Curt Schilling's company sputtered into bankruptcy last year is heading to the auction block.
Heritage Global Partners on Friday began formally marketing the "massively multiplayer online" game and other intellectual property belonging to 38 Studios. Prospective bidders will be vetted ahead of an auction tentatively scheduled for November.
Richard Land, the court-appointed receiver for 38 Studios, and Nick Jimenez, executive vice president at Heritage, declined to estimate the worth of the game, code-named "Copernicus," which went unfinished when the company ran out of money and laid off all its employees.
"There was a lot of work put into it and a lot of work was completed, but it was a huge undertaking," said Land. "I do believe that 'Copernicus' has significant value."
Land said multiple parties expressed interest even before the auction house went live Friday with a 38 Studios page on its website, a YouTube trailer for the game and information about the other assets being sold off.
Said Jimenez: "I would hope we get companies that are interested in doing something with the games that would help complete the vision of the business."
But Michael Pachter, an industry analyst at Los Angeles-based Wedbush Securities, said he doubts the game is worth much or that many parties will bid, because it could cost anywhere from $20 million to $100 million to finish it.
"It's like buying a brand that hasn't been marketed yet," he said of 38 Studios.
In 2010, the board of the quasi-public Rhode Island Economic Development Corp. approved a $75 million loan guarantee for 38 Studios to lure it to Providence from Massachusetts. Then-Gov. Don Carcieri and other top officials said at the time the deal would be an economic boon for state, which was struggling with high unemployment and desperate to create jobs.
With the company's bankruptcy, the state is now on the hook for some $90 million related to the deal, which was financed with bonds.
The economic development corporation is suing Schilling, former 38 Studios executives and some of its own former officials in an effort to cover taxpayer losses. The lawsuit alleges fraud, negligence and breach of fiduciary duty, among other things, and claims the defendants concealed that 38 Studios would run out of money by last year.