The $75 million loan guarantee granted to Curt Schilling and the now bankrupt 38 Studios could have an effect on the upcoming Rhode Island elections.
The $75 million loan guarantee granted to Curt Schilling and the now bankrupt 38 Studios could have an effect on the upcoming Rhode Island elections, according to the Associated Press. Lawmakers are facing heavy questions about the investment.
The loan guarantee was given to 38 Studios by Rhode Island's Economic Development Corporation. Although the EDC now operates under a new policy that caps a loan at $10 million, it went into effect only last year after Gov. Lincoln Chaffee took office. The original legislation, which passed in 2010, reached up to amounts of $125 million in loans. According to the AP, "the majority of the EDC board members who approved the guarantee have since stepped down."
Several lawmakers were under the impression that the $75 million loan would be of benefit to several small businesses and not just 38 Studios, the AP reports. "38 Studios was never mentioned when we voted," said Sen. Michael Pinga. Michael McCaffrey was in a similar boat; McCaffrey told the AP that it was his assumption that it would benefit "lots of small businesses."
38 Studios filed for bankruptcy on June 7th of this year after laying off its entire staff. Many of the studio's employees did not receive their final paychecks. Read Polygon's complete 38 Studios coverage here.