Rhode Island Agency: No Action on 38 Studios

The Rhode Island Economic Development Corp. discussed the problems of Curt Schilling’s 38 Studios LLC at a Monday night meeting in Providence, but did nothing.

The quasi-public state agency, under fire for providing a $75 million loan guarantee to the former Boston Red Sox pitcher’s video-game company in 2010, backed by a bond sale, was tight-lipped.

“Members of the board asked additional questions of company representatives and had candid dialogue,” the EDC said in a statement late Monday night, without elaborating. “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.”

After the controversy over the financing exploded last week, Keith Stokes resigned as EDC chairman.

Schilling muscled his way past reporters after the meeting. “I’m not prepared to give a sound bite,” he said. “When I can speak directly and clearly, then I’ll say my piece.”

Rhode Island Gov. Lincoln Chafee, in a press conference after the meeting, acknowledged that the company laid off some employees. It missed payroll last week, though some employees got back pay. “I believe it was a mix,” Chafee said.

The EDC guaranteed the loan to entice Schilling, who founded the company in 2010, to move from Maynard, Mass., to downtown Providence.

“Rhode Island is well-suited to support a video-game cluster,” the company said at the time, according to minutes from an EDC meeting. Company officials, including Schilling, trumpeted the potential for such firms, the existence within the state of Hasbro Inc. and Gtech International Resources Ltd. and the proximity of such schools as Brown University, the Rhode Island School of Design and the University of Rhode Island.

“It’s a company that is in a very difficult, complex and very competitive market,” said Chafee, who, while running for governor in 2010, spoke out against the loan. “I want to see 38 Studios succeed, as does every Rhode Islander, because we’re into them for tens of millions of dollars. At the same time, we have to balance the risk of losing another penny, and that’s what’s taking up our time here.”

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