May 29th, 2013 
Mark Chafee administration intent on paying back lenders who financed $75 million loan, but also collecting information regarding what it would cost to not pay back debt.
Rhode Island governor Lincoln Chafee remains intent on paying back the lenders who financed Curt Schilling’s now-bankrupt 38 Studios, but is also exploring the costs of not doing so.
Chafee spokesperson Christine Hunsinger told The Providence Journal that though the governor wants to fulfil a “moral obligation” to pay the debt, he also wants to be prudent in examining all options.
“[That] doesn’t mean you don’t analyze what the situation is, or gather data to understand the ramifications of what that decision would be,” she said, noting the state has been collecting information about this option for several months.
Rhode Island lawmakers voiced opinions on the matter last month. Supporters of the default plan say taxpayers should not be forced to pay for the 38 Studios situation. Representative and sponsor of one of the bills Karen MacBeth (D-Cumberland) told the Associated Press in April that insurance on the loan will cover the costs.
“The state of Rhode Island cannot afford to put this burden on the backs of the taxpayers,” MacBeth said at the time. “Have the insurance company pay the bill. This is why we have insurance. The insurance company understood the risk. Now let them pay.”
On the other side of the argument, Rhode Island Economic Development Corporation Chief of Staff John Pagliarini cautioned lawmakers that defaulting on the loan could make it more difficult to finance future projects and negatively impact the state’s bond ratings overall.
Under Chafee’s latest proposal, an initial $2.5 million payment will be made to lenders, followed by $12.5 million each of the following seven years. That would total about $112.6 million–$75 million for the original loan and $37.6 million for the interest accrued over ten years.
Rhode Island is currently suing Schilling and other architects of the $75 million loan that brought 38 Studios to the Ocean State in 2010. In addition, the state is attempting to sell the Amalur franchise, which it acquired when 38 Studios went under last summer.
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