PROVIDENCE, R.I. (AP) ? Former Red Sox pitcher Curt Schilling briefed Rhode Island Gov. Lincoln Chafee and economic development officials Wednesday during a closed-door meeting that could determine the fate of his video game company.
The Economic Development Corp. board voted to go into executive session to receive what it called highly confidential information on the finances of 38 Studios. Following a morning presentation by Schilling the board returned to its deliberations Wednesday afternoon.
Spokespeople for the corporation said the discussions with Schilling were candid and that the board is likely to take action. The board has said it would report back in public session whatever steps it decides to take.
Concerns about 38 Studios' financial health arose when it failed to make a scheduled $1.1 million payment on May 1 to the Economic Development Corp.
The business was lured from Massachusetts in 2010 after Rhode Island offered a $75 million loan guarantee that state officials said would help bring hundreds of jobs and millions in tax revenue.
Chafee has vowed to do "everything possible" to assist 38 Studios and prevent the state from having to pay the company's debts.
He declined to say Tuesday whether the state would be asked for concessions ? or financial support ? to help the Providence-based business.
"The most important thing, going forward, is the viability of the company," said Chafee, an independent. "We're looking at everything."
House Speaker Gordon Fox said he began hearing "inklings" about trouble at the company a few weeks ago, but still doesn't have the necessary information to gauge the company's health.
"It's technical financial stuff," said Fox, D-Providence. "You have to figure out the details before you can say anything."
Under the terms of the loan guarantee agreement, 38 Studios promised to bring to Rhode Island a total of 450 jobs over three years. An outside monitor was to follow the company's progress.
A representative of 38 Studios did not immediately return a message left by The Associated Press.
The company released its much-anticipated first game, "Kingdoms of Amalur: Reckoning," to strong reviews in February.
Chafee and others criticized the loan guarantee at the time it was offered, saying it was putting taxpayer money at risk to help a company with no track record of success. During his run for governor, Chafee called it "one of the biggest risks I've ever seen."
"It's irrelevant now," he told The Associated Press. "Now we just make good decisions going forward."
Economic Development Corp. Executive Director Keith Stokes said at the time the board determined the loan agreement was a calculated risk well worth taking. Stokes said the board performed months of due diligence in analyzing the gaming sector and 38 Studios and crafted a loan guarantee agreement that included strict performance benchmarks.
He said the agreement went "to great lengths to safeguard taxpayers and ensure economic performance."
Under legislation passed in 2010, the General Assembly created a program giving the economic development agency the authority to back up to $125 million in loans to businesses promising to create permanent, full-time jobs.
The loans would come from lending institutions, not the state, but Rhode Island would agree to repay the lender if a company defaulted.
The corporation issued bonds in 2010 and set aside the proceeds of the bond sale for 38 Studios to tap when the company met financial milestones.
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Associated Press writer Laura Crimaldi contributed to this report.
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