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38 Studios' late payment to RI clears bank; Copernicus set for 2013 (update)

by Steve Watts, May 18, 2012 6:45am PDT
Related Topics – Legal, 38 Studios

Update: 10:45 a.m. PST, In a live press conference, Rhode Island Gov. Chafee said that the $1.125 million check from 38 Studios has cleared the bank. A debt service payment of more than $2.5 million is due Nov. 1. The governor also said that the MMO Project Copernicus was set for June of 2013.

Original Story: Troubles continue to mount for 38 Studios. After requesting additional Rhode Island state assistance, the company was unable to pay its employees this week. It also hand-delivered a check for the overdue $1.125 million to the state's Economic Development Corporation, but company CFO Rick Wester told the EDC that there were insufficient funds to cover the check.

Local Rhode Island station WPRI reports that 38 Studios advised the EDC about its inability to pay its workers. Plus, Joystiq reports that temps and contractors working for the company were let go this week. The company was composed of 379 full-time employees as of March 15, 288 in the state of Rhode Island.

Governor Lincoln Chafee's office said the EDC is willing to accept a check for the overdue payment if the company can provide "readily available funds." The board is set to meet again on Monday, but has not given any definite word on whether or not it will offer assistance to the company.

The Rhode Island government is suffering its own blowback. Keith Stokes, EDC executive director and the architect of the $75 million loan guarantee, resigned on Wednesday. Chafee is stressing that he did not favor the initial loan guarantee, but is now supportive of the company to save taxpayer money. The EDC reportedly put aside $12.8 million of the $75 million in case of default.




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