Rhode Island Governor Speaks out on 38 Studios Deal

April 22, 2013 -

In an extensive New York Times article on the demise of former Red Sox all-star pitcher Curt Schilling's 38 Studios, current Rhode Island governor Lincoln Chafee (I) shares his thoughts on what led to the studio defaulting on a $75 million loan from the state and the studio's eventual bankruptcy.

The most interesting thing the current governor has to say about the deal was that he was "reluctant to micromanage" the state's investment in 38 Studios, because his administration had its hands full with plenty of other problems in Rhode Island at the time. When he was running for the office in July of 2010, he went out of his way to say that the deal was not a good fit for the state.

"I had so many reservations about this being a bad deal, that I was reluctant to micromanage, to have it be 'Chafee screwing this up,'" he said. "And don't forget, we had our hands full in this state."

The New York Times report goes on to say that Chafee told them that he did "everything [he] could" to keep 38 Studios from going bankrupt, but that he did not make any "consequential changes" to the Economic Development Corporation board, which oversaw the studio's funding, until after it was defunct.

Chafee added that he left that matter in the hands of EDC executive director Keith Stokes because he was a "longtime friend" of the president of the state Senate and removing him would have had political consequences and get in the way of other business. The Times (citing the Providence Journal) also reports that the EDC board held 63 meetings between September 2010 and May 2012 but never discussed 38 Studios' financial status. IBM's consulting arms was also apparently monitoring the 38 Studios investment, but it did not share any information with the board, and Chafee did not "dispute the suggestion" that more could have been done to keep an eye on the situation.

You can read the seven page story on the fall of 38 Studios here.

Source: Polygon

 


 
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