In June, Curt Schilling's video game company 38 Studios filed for bankruptcy. Over the years, the former Diamondbacks pitcher took out a number of loans to keep the floundering business afloat.
As collateral for the loans, Schilling put up the "bloody sock" he wore during Game 6 of the 2004 American League Championship Series. Now the famed sock could be history, The Associated Press reports.
In 2010, 38 Studios moved from Massachusetts to Rhode Island, after Rhode Island's economic development agency approved a $75 million loan to help promote job growth. The agency projected that 38 Studios would create hundreds of jobs and produce millions of dollars in tax revenue.
However, the company never took off and ended up filing for Chapter 7 bankruptcy back in June. A Chapter 7 bankruptcy will allow 38 Studios to extinguish nearly all of its debts in one fell swoop. However, the debt discharge comes at a cost.
The company's assets, including both physical property and intellectual property, will be sold off. The proceeds from the sale will then go toward paying off the company's creditors. Secured creditors, meaning those whose loans are secured by collateral, will be paid first.
Now 38 Studios owes Rhode Island $115.9 million, making the state its biggest creditor. Unfortunately, taxpayers will probably have to make up for a portion of the debt.
Curt Schilling is also on the hook. The former pitcher personally guaranteed as much as $9.6 million in loans from Bank Rhode Island and $2.4 million in loans from Citizens Bank to keep 38 Studios alive.
Schilling listed his famous bloody sock as collateral for the millions of dollars in loans. The bankruptcy trustee could potentially seize the sock and sell it at auction. A sale is projected to bring in anywhere from $50,000 to $150,000. The sock is currently on display at the National Baseball Hall of Fame in Cooperstown, N.Y.
- Curt Schilling Might Have To Sell His Famed Bloody Sock To Pay Off His Debts (Business Insider)
- Chapter 7: How it Works (FindLaw)
- Debts that Remain After a Chapter 7 Discharge (FindLaw)
- ESPN Covers Pro Athlete Bankruptcies in 'Broke' Documentary (FindLaw's Phoenix Bankruptcy Law Blog)