38 Studios missed a $1 million loan repayment

More details have surfaced regarding the financial woes of Kingdoms of Amalur: Reckoning developer 38 Studios, currently in debt to the state of Rhode Island.

WPRI reports Rhode Island House speaker Gordon Fox confirmed the developer defaulted on a May 1 repayment of $1.125 million.

The developer is said to be suffering a cash-flow shortfall and is seeking bridge funding despite exploiting tax credits. It has not applied to the state government for funding to resolve its problems, presumably because the state loaned it the $75 million it's struggling to repay.

The state's Economic Development Corporation has scheduled an emergency meeting to try and sort out the struggling company, and probably ask some hard questions about how the developer spent the $49.8 million in cash it drew on.

Nevertheless, the house speaker said he doesn't regret helping push through the loan program which attracted the developer, previously headquartered in Massacusetts, noting that studio head Curt Schilling knows what he's doing.

"He seems to have a lot of people around him that seem to know what they're doing and from what I've been seeing, they're a great company that's good for Rhode Island," Fox said.

38 Studios employs 379 full time staff plus contractors and interns. It is currently working on an MMO in the Amalur setting, code named Copernicus.

Thanks, Joystiq.