Former RIEDC head accuses Rhode Island governor of blocking 38 Studios’ attempts to avoid bankruptcy

Saturday, 5 October 2013 22:08 GMT By Stephany Nunneley

The former head of the Rhode Island Economic Development Corporation has accused Rhode Island governor Lincoln Chafee of blocking attempts made by 38 Studios to handle debt and raise capital before it file for bankruptcy.

The studio’s co-founder, Curt Schilling, said when the company filed bankruptcy in May 2012, Chafee had made public remarks “that were devastating to the company’s attempts to stay solvent,” and according to a lawyer for former RIEDC head Keith Stokes, the did more than mouth off in public to hurt the game developer.

According to a report from the Boston Globe, Stokes’ lawyer said Chafee actively blocked 38 Studios’ attempts to restructure and refused to meet with executives in 2011 over the matter. The claim also states he forgoed attempts to even discuss the matter with the RIEDC’s board of directors.

Chafee, on the other hand, claims he “made every attempt to save the company.”

It has also been noted before by Chafee, that he was against the $75 million taxpayer-guaranteed loan brokered between former governor Donald Carcieri and 38 Studios.

The deal saw 38 Studios relocate from Massachusetts in 2010.

A lawsuit accusing the Kingdoms of Amalur developer of “fraud, negligence, breach of fiduciary duty, racketeering and conspiracy” as well as misleading Rhode Island’s economic development agency has been brought against the company by the state, with other defendants including four former 38 Studios executives and its insurer.

Thanks, GI International.