Rhode Island establishes plan to repay 38 Studios’ loan debts

38 Studios founder curt schilling could lose 50 million

The state of Rhode Island will begin to repay the $89 million debt left behind by Curt Schilling’s 38 Studios with a single $2.5 million payment in 2014, Reuters reports. The state sold $75 million in taxable bonds to the Kingdoms of Amalur developer as an incentive to establish its business there in 2010. When the studio shut down in 2012, the state was left with a sizable debt, plus interest, to be repaid.

The House Finance Committee approved a budget on Tuesday, June 18, that accounts for the initial payment, though approval is still needed from the rest of the state’s legislature. Further, the state could still default on further payments after the initial payout next year.

Previously, Rhode Island governor Lincoln Chafee launched an investigation into the consequences of simply ignoring the debt, but officials are reportedly concerned about the effect such a move would have on the state’s credit rating. There’s also fear that it could drive up the cost of borrowing for bond issuers throughout the state.

Rhode Island Democrats held a special caucus on Tuesday prior to the House Finance Committee’s decision to argue these points. “This isn’t about 38 Studios. It’s about protecting our reputation,” the state’s director of administration Richard Licht said at the meeting.