Rhode Island Republicans Call for Investigation Into 38 Studios Deal, Urge a Default on $100 Million Debt

June 6, 2013 -

The leader of Rhode Island's Republican Party is calling for a special investigation into the legislature's involvement in the state's failed investment in former Red Sox pitcher Curt Schilling's video game company 38 Studios. After the studio went bankrupt the state was left holding the bag to the tune of $100 million.

GOP Chairman Mark Smiley said on Wednesday that he supports fresh legislation to commission a review the events that occurred leading up to the state's Economic Development Corp. board approving a $75 million loan guarantee for 38 Studios. While legislation has already introduced by Senate Republicans it seems to have stalled in the Rhode Island General Assembly. Smiley said on Wednesday that RI taxpayers deserve answers.

Earlier in the week Rhode Island Republicans demanded that the state default on the $100 million that it faces in the aftermath of 38 Studios going bankrupt. It was also reported yesterday that the state has collected a little over $1 million related to the assets it secured from 38 Studios when it went bankrupt including the Kingdoms of Amalur game and the MMO it was working on - as well as various items auctioned off from 38 Studios' offices including computers and office furniture. The state is currently suing Schilling and former officers of the company.

GOP lawmakers say that the state isn’t legally required to pay back the bonds. Critics of that plan say it will hurt the state's credit rating and will make it harder to secure financing in the future.

State Republican Chairman Mark Smiley said the people who purchased the bonds should use the insurance policy they bought as part of the investment. He also said taxpayers shouldn’t have to pay for a decision they didn’t have a say in. An investment expert is expected to give a presentation sometime today to lawmakers on the pros and cons of defaulting on the 38 Studios’ bonds.

Source: RIPR.org, KASA.com

 

 


 
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