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Project Copernicus concept

News surrounding yesterday’s company-wide layoff at Kingdoms of Amalur: Reckoning developer 38 Studios continues to roll in as people in and around the event speak up about exactly what happened between the company and the government of Rhode Island, which funded the studio through a $75 million loan.

“We are doing our best to salvage this, but the situation is very dire,” Rhode Island governor Lincoln Chafee said today in an interview with Bloomburg Television. “It was really insanity on the part of the previous administration to get into this high-risk industry, and now we’re seeing the ramifications.”

Further, because the studio did not give the state advance notice about yesterday’s firings, it is now back in default on its loan, Chafee said in a press conference this afternoon. The studio has 30 days to come out of default before it can receive millions of dollars in tax credits it asked for, and the governor is requesting a forensic audit of the company.

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Meanwhile, former 38 Studios environment artist Victor Cortis claims the state government “flat out lied” when it promised to give the studio those credits after it made a $1.125 million payment to the Rhode Island Economic Development Corporation, according to a forum post at game-artist community site Polycount. “The million dollar + payment that went to Rhode Island was in assurance we would receive the tax credits of [$8 million]. We even had buyers lined up for the credits and the government was sitting there telling us ‘You give us the million, we give you the tax credits,'” Cortis said. “We gave them the million. They did not give us the tax credits, which would’ve not only [paid] the employees, but saved the studio most likely as we had several publishing deals in the works.” (via Twinfinite)

Fantasy author R.A. Salvatore, who wrote Reckoning and was consulting on its massively multiplayer online follow-up, Copernicus, came to 38 Studios’ defense in a thread on political blog Daily KOS. “38 didn’t go begging for a handout from Rhode Island,” Salvatore wrote. “Rhode Island offered to secure a bond for them when the credit crunch reigned, trying to lure them out of Massachusetts.”

Speaking more generally about this experience with the team, Salvatore said, “I have to tell you that this was an amazing team of designers, engineers, artists, animators, writers, audio team and all the rest, all chasing a common dream — all pushing the envelope in their respective fields [. . .] And lord, I love ’em all and miss them already.” (via The Escapist)

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