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Schilling: R.I. refused to renegotiate loan

BLOOMBERG FILE PHOTO/SCOTT EELLS
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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