Documents Reveal Who Bought 38 Studios Bonds in 2010

Six or so of the missing 38 Studios investor letters have surfaced, according to the Providence Journal. The documents provide new information about all of the different companies and organizations that backed the bonds that funded the $75 million loan to 38 Studios.

Investors included the Attorney’s Liability Protection Society, the South Dakota State University Endowment Foundation and the Wells Fargo Corporation Pension Plan. The letters signed on their behalf by their portfolio managers, highlight that they were each "sufficiently knowledgeable and experienced in financial and business matters, including the purchase and ownership of taxable bonds, to be able to evaluate the risks and merits of the investment."

The letters also acknowledged that these agents were"able to bear the economic risks of an investment in the bonds… [and] withstand without material injury a complete loss of investment in the bonds."

These letters were required as part of the bond sale and copies of each were supposed to go to 10 entities, including two securities firms, five law firms and 38 Studios. One copy was also supposed to go to the state’s Economic Development Corporation (now known as the Rhode Island Commerce Corporation), but the agency was unable to produce them until this week.

On Monday, just before a State House hearing on House Oversight chairwoman Karen MacBeth’s legislation to prohibit repayment of the 38 Studios "moral obligation bonds," the letter were delivered.

According to the Providence Journal report, the following firms made these investments in the bonds: The Attorneys Liability Protection Society ($500,000), Pitt County Memorial Hospital ($400,000), South Dakota State University Endowment Foundation ($150,000), George Gund Foundation ($200,000), Minnesota Lawyers Mutual Insurance Company ($500,000), Mayo Foundation General Fund ($500,000), Germantown Mutual Insurance Company ($250,000), Ohio Indemnity ($500,000), Cape Fear Valley Health System ($500,000), Acuity ($1 million) and the Wells Fargo Corporation Pension Plan ($500,000).

The bonds were sold in three blocks totaling $75 million and paid interest ranging from 6 to 7.75 percent annually.

The Providence Journal report contains the documents in question, which you can read for yourself here.

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