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Rhode Island Defaulting?

By Azeebo04-02-2014

It was a real shame when 38 Studios went bust. Kingdoms of Amalur, their crowning jewel, simply did not do enough financially and everything went out the window pretty darn quickly. Not only did we lose a fairly good company, but it seems they have left the State of Rhode Island with a staggering $90 million debt.

The Rhode Island Commerce Corp. gave 38 Studios a whopping $75 million in 2010, with the idea that relocating their studio to the state would provide 450 jobs, and of course, a full repayment on the loan by 2012. This was not the case, and 38 Studios filed for bankruptcy early 2012.

This has left the State in a bit of a conundrum. Democratic Rep. Karen MacBeth introduced a bill that would prohibit the Commerce Corp. from making payments related to the $75 million loan guarantee.  The upside to this, according to MacBeth, is that the taxpayer would not have to pay for the bad investment the State made. Gov. Lincoln Chafee on the other hand thinks that the default would harm the State financial reputation, as well as increase borrowing costs.

Whether or not MacBeth gets her way and makes the Rhode Island Commerce Corp. pay for their mistakes has yet to be seen, but either way, it seems someone, somewhere is going to be shafted due to the this investment.


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