38 Studios employees go unpaid

38 Studios employees go unpaid
Seth Tipps

By Seth Tipps

May 17th 2012 at 11:04PM

Company hands Rhode Island EDC bad check as employees go without salary

The financial woes of Curt Schilling's 38 Studios deepened today, with reports surfacing that the company missed employee payroll today.

The studio moved to Rhode Island in 2010, after being offered a state guaranteed loan for $75 million on the condition they relocate to the state and provide 450 high-paying jobs.

The studio released its first game, Kingdoms of Amalur in February to good reviews, with sales currently reported at 500,000, but missed an annual payment of$1.125 million on the loan.

Governor Lincoln Chaffee's office told WPRI that the company hand delivered a check for the missed payment to the RI economic development corporation, but 38 Studios' chief financial officer Rick Wester later called the agency to say there was not enough money to cover it.

The EDC then returned the check.

News of the missed payroll was confirmed by EDC spokeswoman Judy Chong, though the developers themselves have not made any statement on the matter.

If the company defaults on the loan, taxpayers will be on the hook for up to $112 million over the next eight years, and the rights for Kingdoms of Amalur will be sceded to the state.

Earlier today, it was announced that the EDC's executive director and primary advocate of the $75 million dollar loan had tendered his resignation.

Governor Chaffee accepted the withdrawal on Wednesday evening, but has not issued a statement.