EDC board takes no action on 38 Studios

CURT SCHILLING, founder of 38 Studios LLC and a former Boston Red Sox pitcher, attended the R.I. Economic Development Corporation's monthly meeting Monday, looking to help his video-game company deal with a severe cash shortage, but the EDC adjourned without taking any action.
Posted 5/21/12

PROVIDENCE – The R.I. Economic Development Corporation board of directors adjourned its regularly scheduled monthly meeting on Monday without taking any action on the troubled video game developer 38 Studios LLC.

Company founder Curt Schilling, along with a team from his company, had come to the meeting, which was a continuation of the emergency meeting the board had called last Wednesday. Schilling and his team were sequestered from the board meeting – which immediately went into executive session – when it began.

Soon after Schilling was called into the session, but after emerging and meeting with his team, the former Boston Red Sox star pitcher departed the EDC’s Valley neighborhood offices without answering any questions, although he did say that the company was not looking for any taxpayer money before climbing into a sedan and departing.

Speaking to the media after the meeting adjourned, Gov. Lincoln D. Chafee said that the board had taken no action and that the financial condition of 38 Studios was unchanged from last week.

Chafee did say, however, that the company had had some layoffs and had made other unspecified adjustments, although he would not elaborate.

The governor also was more diplomatic than he was last week when discussing what aid the state might be willing to give the company, although he did maintain that any aid that might be forthcoming would be on the conservative side. And he emphasized that he would keep the taxpayers utmost in his mind when agreeing to anything.

The EDC released this statement at 8:43 p.m.:

“The RIEDC Board of Directors met in closed session to receive additional, confidential information regarding the financial and game development status of 38 Studios. Members of the Board asked additional questions of company representatives and had candid dialogue. The Board also received information regarding the structure of the bond transaction and received a report from our auditor Braver PC. The Board did not take a vote tonight. The members of the Board may not discuss the confidential information received and discussed today.”

In addition to receiving nearly $50 million from the $75 million worth of bonds that the state guaranteed, the company has applied for $14.1 million film tax credits over the last two years.

It is unknown what other specific requests for help were made the company, if any.

The meeting on Wednesday was precipitated by the failure of 38 Studios to make a $1.125 million payment to the state on May 1, one in a series of payments to the state for providing the loan guarantees for the $75 million in bonds that were sold on behalf of the company.

In addition, the company revealed last week that it had missed its payroll.

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