Chafee says he’s vindicated by testimony in 38 Studios’ bankruptcy; pledges review of EDC oversight

Jul 11, 2012

Governor Lincoln Chafee says he’s vindicated by testimony offered yesterday during a meeting in Wilmington, Delaware, on the bankruptcy of Curt Schilling’s failed video game company, 38 Studios.

“Essentially, they were confirming what I’ve said all along,” Chafee told me this morning following a news conference to mark the opening of PPAC Square in Providence. “. . . .  I do believe when the facts come out, it’s going to support what I’ve been saying. They needed private investment right from the beginning.”

The governor continued:

You might say right from the beginning the deal was, based on yesterday’s testimony, flawed – that they couldn’t survive just alone on the state contribution.

Chafee called it “not a surprise” that 38 Studios has few assets to limit the liability of Rhode Island taxpayers.

The governor nonetheless pointed to the hiring of Max Wistow’s law firm and said he’s holding out hope the state will get something to cut the roughly $100 million in liability faced by taxpayers. 

I asked Chafee when the state will make public a full accounting of how the state Economic Development Corporation monitored the $75 million dollar loan guarantee for 38 Studios. His response:

That is something that we’ve got to work on. We’ve certainly had our plate full with putting together the team that has looked at recouping funds. That’s number one, that’s what we want to make sure we do — solidify any assets that are there and make sure we’re doing everything aggressively possible to get every state taxpayer dollar back that we possibly can.

Chafee says he’s committed to doing a “retrospective” at the “the appropriate time.”

I asked, when’s the appropriate time?

Well, the first thing is we’re getting our team to make sure we protect the taxpayer dollar through the bankrupcty proceeding. That should occur.