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RI to pay $2.4 million to 38 Studios investors with state funds

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Rhode Island will make an interest payment of $2,431,506 to the investors who backed the failed 38 Studios loan guarantee today, the Providence Journal reports.

Today's payment marks the first time that the state will use funds not previously earmarked for payments. Funds for previous payments, including the last payment made Nov. 1, 2013, came from "money set aside in reserve at the outset of this doomed venture."

Rhode Island, through the Rhode Island Economic Development Corporation (now known as the Rhode Island Commerce Corporation), backed the 38 Studios loan guarantee in 2010. Intended to bring the developer of Kingdoms of Amalur: Reckoning and the unreleased massively multiplayer online role-playing game Project Copernicus and 450 jobs to the state, former Red Sox pitcher Curt Schilling's development studio declared bankruptcy in June 2012. The state filed suit later that year maintaining that it those involved in approving the loan guarantee did not disclose all associated risks.

In early January 2014, Governor Lincoln Chafee's administration submitted legislation designed to encourage settlements in the case. The Rhode Island Senate passed a settlement bill unanimously that same month, and the state's House of Representatives approved the bill in February.

In early April, the new charwoman of the Rhode Island House Committee on Oversight, Rep. Karen MacBeth, said she might issue subpoenas related to the lawsuit. According to the Providence Journal, the House Oversight Committee has reopened its investigation into the failed 38 Studios loan guarantee. On April 22, MacBeth sent letters to seven people, including Schilling, requesting that they appear before the committee "to provide your insight and describe your involvement in the Jobs Creation Loan Guaranty Program."

Before becoming the chairwoman, MacBeth proposed legislation, once in 2013 and again in 2014, that would prevent the state from continuing to make payments.

You can follow along with the history of 38 Studios' decline and continuing developments in Polygon's 38 Studios StoryStream.