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38 Studios In Money Trouble With The State Of Rhode Island Over $1.125 Million Missed Loan Payment

G4TVLeah
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Posted May 17, 2012 - By Leah Jackson

5 Thoughts On Kingdoms of Amalur

Curt Schillings' 38 Studios, developers of Kingdoms of Amalur: Reckoning, have reportedly bounced a check for $1.125 million to the state of Rhode Island. The money was meant to payoff the overdue part of a loan given to 38 from the Rhode Island Economic Development Corporation. Earlier in May, the company defaulted on the $75 million loan from RIEDC.

The Office of Governor Lincoln D. Chafee released a statement about the issue reading: "A check from 38 Studios was hand-delivered to the Rhode Island Economic Development Corporation at approximately 5 o'clock this evening [May 17, 2012]. However, upon learning from the Chief Financial Officer of 38 Studios that there were insufficient funds to cover the payment, the check was returned. The EDC remains willing to accept readily available funds."

Additionally, the developer wasn't able to make its payroll this week, leaving at least some of the company's 379 full-time employees without a paycheck. 38 let go all of their temps and contractors, according to Joystiq.

The EDC called a three-hour emergency meeting on May 16, 2012 to determine what they were going to do about the funds. In the end they decided not to take immediate action to help the developer.

"The company still has the option to cure the existing default by paying the $1,125,000 guaranty fee that is past due," read an official statement from the EDC board. "In the meantime, we will continue to talk with 38 Studios and develop additional information, and will resume the Board meeting at our regularly scheduled meeting on May 21. The members of the Board may not discuss the confidential information received and discussed today."

What this boils down to is that if the Studio's forced to close, Rhode Island tax payers will be on the line for the $75 million bond, plus interest, through 2020. They'd also own the intellectual property of 38 Studios, which could be sold at an auction.

38 Studios tried to pay the $1.125 million loan back today, May 17, 2012 but according to Joystiq the hand-delivered check was returned by the EDC due to insufficient funds.

We'll keep you updated as the story unfolds, but for now it's definitely not looking good for 38 Studios.

Source: Joystiq

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38 Studios In Money Trouble With The State Of Rhode Island Over $1.125 Million Missed Loan Payment
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