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RI Proposes Bill To End Further Payments On 38 Studios' Debt

by Kyle Hilliard on Feb 02, 2014 at 07:32 AM

A bill proposed last week by Rhode Island Lawmakers that, if passed, would allow the state to default on its debts incurred by investing in 38 Studios.

According to an AP news report, the bill was proposed by democratic rep. Karen MacBeth on Thursday and would prevent Rhode Island's Commerce Corp. from making payments towards the $75 million loan given to 38 Studios, which went bankrupt shortly after the release of Kingdoms of Amalur.

The Commerce Corp., originally called the Economic Development Corporation, was founded in order to help Rhode Island businesses grow and expand gave the loan to 38 Studios after its promise of creating hundreds of jobs in the state.

The arguments in favor of the bill says Rhode Island taxpayers shouldn't be held responsible for the failed investment. Arguments against the bill, of which governor Lincoln Chafee is part of, say that defaulting on the loan would hurt Rhode Island's reputation. Chafee has been an outspoken detractor of 38 Studios and the loan (which was approved before he was in office), recently calling the studios' unreleased MMO, "a lot of junk."

For more on the ongoing troubled relationship between the state of Rhode Island and 38 Studios, head here and here.

[Source: News10 (AP), via Polygon]


Our Take
I can't imagine defaulting on the loan would tarnish Rhode Island's financial reputation any more thatn it already has been, in regard to governor Chafee's argument. MacBeth's argument that taxpayers, who had no say on Rhode Island's investment into a video games studio, is fairly sound. I'm curious to see where the bill lands. It will be a long time before we hear the end of the Rhode Island and 38 Studios.