38 Studios defaulted on loan payment

Kingdoms of Amalur: Reckoning developer 38 Studios defaulted on a $1.125 million loan payment to the Rhode Island Economic Development Corporation (EC), according to reports from WPRI.

Kingdoms of Amalur: Reckoning developer 38 Studios defaulted on a $1.125 million loan payment to the Rhode Island Economic Development Corporation (EDC), according to reports from WPRI.

In 2010, the Rhode Island EDC gave 38 Studios a $75 million taxpayer-backed loan to lure the studio from Massachusetts to Rhode Island. Under the terms of the loan, 38 Studios agreed to pay the EDC an "Annual Guaranty Fee" of 1.5% of the loan ($1.125 million) on May 1 of each year. Reports state that the studio received $49.8 million in cash from the loan but defaulted on May 1 when it failed to make the $1.125 million payment.

Rhode Island House Speaker Gordon Fox told the media that 38 Studios is currently seeking bridge financing to get it through a cash-flow shortfall, but declined to comment any further. "I don't want to give you any more details on that because I'll mess them up," he said.

The EDC board scheduled a meeting for tomorrow morning to discuss "an unexpected occurrence that requires immediate action to protect the public regarding the 38 Studios, LCC financing".

We have contacted 38 Studios for comment and will update this story when they reply.