Rhode Island Makes Interest Payment Related to Failed 38 Studios Loan Deal

Today Rhode Island lawmakers will take money from the general fund to make its first payment to the private investors who purchased the $75 million in high-risk, high-yield bonds that financed retired Red Sox pitcher Curt Schilling’s bankrupt video-game company 38 Studios.

On Nov. 1, of last year the state paid down $7,440,000 in principal payments and $2,654,706 in interest, according to the state budget office. That was paid out of money set aside in reserve at the outset of the deal. The payment being made today, a $2,431,506 interest payment, will be paid with state funds.

The General Assembly approved this first taxpayer payment last June, but not before a contentious debate in the House about the matter broke out. Some lawmakers alleged that they had been duped by "misinformation and lies" into approving the loan-guarantee program in 2010, before any public mention of Schilling’s floundering company.

The House Oversight Committee recently reopened its investigation into the 38 Studios debacle, with the new House Oversight chairwoman Rep. Karen MacBeth sending letters to Schilling and six others asking them to appear before the committee voluntarily.

No one has responded to these letters.

New House Speaker Nicholas Mattiello has said he was waiting for a report commissioned by the Governor Lincoln Chafee administration on the potential consequences to the state of not paying this “moral obligation” bond, along with other “expert advice” before making his own decision in future payments.

Source: Providence Journal

Tweet about this on TwitterShare on FacebookShare on Google+Share on RedditEmail this to someone