Former baseball star Curt Schilling's studio first showed signs of trouble last month, when it missed an installment on a $75 million Rhode Island-backed loan, and then failed to pay its employees.
The developer subsequently paid the installment late, but made its entire staff redundant a few days later.
"After ongoing negotiations with the state of Rhode Island and potential investors and other interested parties, the company has been unable to find a solution to the current stalemate," Schilling's spokesman Larry Solters said in a statement.
Parent company 38 Studios LLC has revealed that it owes $150.7 million to 1,079 creditors, the largest portion of which is the $115.9 million loan owed to the Rhode Island Economic Development Corporation (EDC).
Rhode Island tax payers could have to foot nearly $90 million of that debt as a result of the developer's collapse.
The day before 38 Studios declared itself bankrupt, federal and state law enforcement officials launched a formal investigation into the developer's activities and attempts to secure Rhode Island tax credits in an effort to stay afloat.
Subsidiary Big Huge Games was also brought down by 38 Game's implosion, and owes $5.5 million to 28 creditors. Epic Games intends to save that studio's staff, however, and has set up a new studio in Baltimore, Maryland, which it intends to people with as many former Big Huge employees as possible.