Rhode Island investigates dropping 38 Studios debt

Rhode Island investigates dropping 38 Studios debt
Seth Tipps

By Seth Tipps

May 30th 2013 at 8:00AM

Governor still plans on repaying lenders but is looking into effects of cancelling debt

The governor of Rhode Island is gathering information about the ramifications of a decision to drop the state's 38 Studios debt.

The Kingdoms of Amalur developer went bankrupt a year ago, leaving the state with $75 million in loans to pay off that had originally been granted to the studio as incentive to move from neighboring Massachusetts.

Governor Lincoln Chafee's office spokesperson Christine Hunsinger told the Providence Journal that this is just fact-finding and the state still has every intention of repaying the debt.

"It doesn't mean you don't analyse what the situation is, or gather data to understand the ramifications of what that decision would be," she said.

The Governor has joined with state leadership in expressing a “moral obligation” to repay lenders, but also points out there is no legal obligation forcing it to do so.

The current proposal is that the state pays $2.5 million now, with $12.5 million to follow for the next seven years.

This would repay the initial $75 million given to 38 Studios plus $37 million in interest.