Chafee Still Opposed to Defaulting on 38 Studios Loan

Jun 7, 2013

Governor Lincoln Chafee said he remains strongly opposed to the idea of defaulting on moral obligation bonds related to the failure of video game maker 38 Studios. On Thursday, an investment expert  analyzed the pros and cons of default for the House Finance Committee.

The state Republican Party and the five-member Republican caucus in the state Senate have called on the state to default on the bonds for 38 Studios. They say taxpayers shouldn’t be held responsible for a choice they didn’t make. But Governor Chafee said default would hurt Rhode Island’s reputation and caused increased expenses for the state.

"It’s a pall over the state, it’s an impression, and then the reality of lenders looking at Rhode Island."

Under former governor Don Carcieri, Rhode Island lured 38 Studios here with a 75 million dollar loan guaranty. The company went bankrupt last year, leaving the state on the hook for roughly 100 million dollars.

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