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Schilling says RI played role in company's trouble

May 29, 2012
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PROVIDENCE, R.I.—Curt Schilling is blaming Rhode Island economic development officials and the governor for much of the financial troubles facing his video game company.

The former Red Sox pitcher tells the Providence Journal ( http://bit.ly/KNg40H) that the state promised and did not deliver film tax credits for 38 Studios and refused to allow the company to defer a $1.1 million payment, forcing it to miss a May 15 payroll.

In his first public remarks on the company's problems, Schilling told the newspaper for its Tuesday editions that public remarks by Gov. Lincoln Chaffee that the state was trying to keep his company solvent were "devastating." He said that shortly after those remarks, a video-game publisher pulled out of a deal to finance a new game.

"The governor is not operating in the best interest of the company by any stretch, or the taxpayers, or the state," Schilling told the newspaper. "We're trying to save this company and we're working 24/7. The public commentary has been as big a piece of what's happening to us as anything out there."

38 Studios, which was lured to Rhode Island from Massachusetts in 2010 with a $75 million loan guarantee, laid off its entire workforce last week.

Its financial troubles came to light this month when it defaulted on a $1.1 million payment to the state Economic Development Corporation that was due May 1. The company later paid.

But now it is in default again, Chafee said. Under federal law, employers who have at least 100 employees and plan to shed at least 50 jobs are required to give a 60-day notice to workers and state unemployment officials.

Bill Thomas, the 38 Studios president, told the newspaper the state was notified of the layoffs on May 25 because, "We wanted our employees to hear it from us first."

Schilling, 45, tells the newspaper he stands to lose all the money he saved while playing baseball, and rejects criticism that he is seeking a public handout.

"I have done whatever I can do to create jobs and create a successful business, with my own income," he said. "Fifty million dollars, everything I've ever saved, has been put back into the economy. The $49 million from Rhode Island has been put back in the economy. I've never taken a penny and I've done nothing but create jobs and create economy. And so how does that translate into welfare baby? I've tried to do right by people."

Chafee has said he wants to help, but opposes allowing 38 Studios to receive film tax credits after receiving $47 million in state bond money.

Jonathan Savage, a business lawyer who is representing Chafee, said the state is willing to give up its first position to 38 Studio's assets if that will help attract a private investor.

Schilling said that might help, and said he's hoping the company is not finished.

"I pray that it's not," he said. We're doing everything we can do to make that not be the case."

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Information from: The Providence Journal, http://www.providencejournal.com

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