Schilling: R.I. refused to renegotiate loan

IN A WEEI INTERVIEW, CURT SCHILLING, founder of 38 Studios LLC and a former Boston Red Sox pitcher, said that Rhode Island refused to renegotiate the company's loan guarantee even in the wake of a new investor.
Posted 6/21/12

BOSTON – In an interview on the “Dennis & Callahan” sports radio show on WEEI in Boston, former Red Sox pitcher Curt Schilling said that before his now-defunct videogame company 38 Studios LLC filed for bankruptcy, an investor pledged $15 million if Rhode Island agreed to renegotiate the loan - the state refused, according to The Boston Globe.

Schilling said that “at the end” an investor promised to write a check for $15 million to $20 million to save the beleaguered company if the state agreed to give 38 Studios $6 million in tax credits and renegotiate the loan guarantee so that the unnamed investor was first in line to be repaid.

“If that had happened, he would come in and save the company,” Schilling said.

In a separate Boston Globe report, Schilling’s company claimed that the state refused to honor a “fully negotiated deal and agreement” to give the company funding from film tax credits.

According to public record documents obtained by the news source, William Thomas - the president and chief operating officer of 38 Studios - wrote a strongly worded letter to the state’s film office chastising Rhode Island lawmakers for withholding millions of dollars in film tax credits available to video game makers.

In the May 25 letter, Thomas suggested that the state promised to give the gaming company as much as $8.7 million in tax credits after 38 Studios made the $1.1 million payment to the state.

The state decided to withhold funding after 38 Studios missed its payment, but studio executives argued that the payment was made within a grade period and the company wasn’t actually in default.

During his appearance on WEEI, Schilling said that prior to his company’s collapse, the firm was on the verge of signing a deal with a videogame publisher for a sequel to its first game, Kingdoms of Amalur: Reckoning.

According to Schilling, the deal - which was worth as much as $35 million - collapsed after Gov. Lincoln D. Chafee publicly said he was trying to find ways to keep 38 Studios solvent.

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If the state refused to renegotiate the loan with 38 Studios, good for them! That should have been done from day one but when you have former Governor Carcieri pushing the loan what should we expect? Who could possibly believe anything Shilling has to say without being skeptical? They defaulted on payment, they had a check bounce, he reneged on a loan from Citizens, and God knows how else he tried to scam the state. Neither Carcieri or Shilling is known for their integrity and to keep telling us what could have happened doesn't make a bit of difference without identifying the so-called "investors" and verifying their questionable commitment to the project. The sad thing is that once again the burden falls on Rhode Island’s taxpayers. I do hope and pray the Attorney General, District Attorney and State Police do a thorough investigation of this travesty and the sooner the better.

Friday, June 22, 2012 | Report this

RI Department of Revenue requires movie tax credit awardees to be domiciled in Rhode Island. Head of this department is one of our most trusted public officials. She would never bend on this requirement at an administrative level.

Former general counsel to EDC requested in a formal hearing process to modify regulations on this point. That never happened. 38 Studios never reviewed that file according to DOR staff. Governor Chafee did not have the power to grant the movie credits to 38 Studios yet Curt Schilling keeps trying to modify history.

He was burning through $4 million in cash per month with little revenue coming in. He went down in flames because he did not do his homework on the film credits, something I did in less than one hour's time at the DOR.

Friday, June 22, 2012 | Report this
Small Business

Schilling didn't have his eye on the ball and neither did the state.

Saturday, June 23, 2012 | Report this
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