Gov.: RI working to keep Schilling company afloat

Associated Press

PROVIDENCE, R.I. (AP) — Gov. Lincoln Chafee acknowledged concerns about the financial health of former Red Sox pitcher Curt Schilling's video game company Tuesday and said state officials are working to help it remain viable.

Chafee said the state must to "everything possible" to help 38 Studios and prevent the state from having to pay the Providence-based company's debts.

38 Studios was lured from Massachusetts in 2010 after Rhode Island offered a $75 million loan guarantee that state officials said would help bring hundreds of jobs and millions in tax revenue.

The company's present financial health is unclear. Chafee declined to provide more details about its reported financial problems or the discussions. Judy Chong, a spokeswoman for the Economic Development Corp., whose board approved the loan guarantee, said Tuesday she had no information or comment.

It's too early to say whether the state would be asked for concessions — or financial support — to help 38 Studios remain afloat, said Chafee, an independent.

"The most important thing, going forward, is the viability of the company," Chafee said. "We're looking at everything."

House Speaker Gordon Fox said he began hearing "inklings" about trouble at the company a few weeks ago, but still doesn't have the necessary information to gauge the company's health.

"It's technical financial stuff," said Fox, D-Providence. "You have to figure out the details before you can say anything."

A representative of 38 Studios did not immediately return a message left by The Associated Press. Schilling also could not be reached.

The company released its much-anticipated first game, "Kingdoms of Amalur: Reckoning," to strong reviews in February.

Chafee and others criticized the loan guarantee at the time it was offered, saying it was putting taxpayer money at risk to help a company with no track record of success. During his run for governor, Chafee called it "one of the biggest risks I've ever seen."

"It's irrelevant now," he told the AP on Tuesday. "Now we just make good decisions going forward."

EDC Executive Director Keith Stokes said at the time the board determined the loan agreement was a "calculated risk well worth taking." Stokes said the board performed months of "due diligence" in analyzing the gaming sector and 38 Studios and crafted a loan guarantee agreement that included strict performance benchmarks.

He said the agreement went "to great lengths to safeguard taxpayers and ensure economic performance."

Under the terms of the loan guarantee agreement, 38 Studios promised to bring to Rhode Island a total of 450 jobs over three years. An outside monitor was to follow the company's progress.

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