The Rhode Island Department of Labor and Training, which has been investigating complaints that Curt Schilling’s video game company did not pay hundreds of workers, has suspended its probe in light of the firms’ bankruptcy filing last week, a spokeswoman said.
38 Studios LLC, founded by the former Red Sox pitcher, acknowledged in bankruptcy filings that it owed workers more than $2 million. But it seems unlikely workers will recoup their lost pay in bankruptcy court since the Providence company owes more than $150 million and has less than $22 million in assets, most of which is likely to be claimed by the state’s economic development agency.
The agency gave the company a $75 million state-backed loan and is expected to be among the first to be repaid.
Theoretically, the labor department could go after Schilling and other officers personally to try to recoup employees’ pay if workers are unsuccessful in the bankruptcy process. But historically, the agency has ended its efforts once a company files for bankruptcy protection.
Separately, several state and federal law enforcement agencies have also launched their own investigations into 38 Studios. Neither Schilling nor a spokesman for the company could be immediately reached.