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Schilling's company gives RI bad $1.1M check

Associated Press Published: May 17, 2012
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PROVIDENCE, R.I. (AP) — The troubled video game company helmed by former Red Sox pitcher Curt Schilling delivered a $1.1 million payment to Rhode Island Thursday — but the state economic development agency returned the check after learning it would bounce.

The failure by 38 Studios to pay the amount when it was due May 1 has prompted worries about its solvency and the possibility the state might have to step in to pay its debts.

Gov. Lincoln Chafee had said Schilling's company — which got a $75 million loan guarantee from the state in 2010 — planned to make the scheduled payment Thursday. He said the payment would be a "positive step."

38 Studios hand-delivered the check Thursday evening to the state's Economic Development Corp. It was returned after the company's chief financial officer acknowledged the company had insufficient funds to cover the payment.

The agency "remains willing to accept readily available funds," according to a statement from Chafee.

The company relocated from Massachusetts in 2010 after Rhode Island offered the loan guarantee, which state officials said would means hundreds of jobs and millions of dollars in tax revenue.

38 Studios on Wednesday asked the economic agency for additional assistance after missing the scheduled payment, but the agency's board did not act on the request.

Chafee would not describe the details of the request after an emergency board meeting Wednesday. But he said Thursday that the board agreed "unanimously" not to give the company additional taxpayer support.

"I fought very hard to not have further taxpayer investment," Chafee said at the Statehouse. "No taxpayer concessions were made yesterday. So this is positive."

He said he did not know where the funds for the $1.1 million payment originated and if it was Schilling's personal money.

Judy Chong told The Associated Press that 38 Studios informed the Economic Development Corp. that it would be unable to make its payroll this week.

As worries over the company's future mounted, Keith Stokes, the Economic Development Corp.'s executive director, submitted his resignation to Chafee, who accepted it Wednesday. The governor thanked Stokes for his service.

"Keith is committed to seeing Rhode Island succeed and I am confident that he will continue to be very involved in the state he loves," Chafee said.

Stokes told The Associated Press on Thursday that he had been considering stepping aside for a while. He said he met with his staff Thursday morning to inform them of his decision.

As to whether 38 Studios played a role in his decision, Stokes quoted novelist William Faulkner, saying "all of us fail to match our dreams of perfection."

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