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38 Studios check rejected by EDC

BLOOMBERG FILE PHOTO/TONY AVELAR
38 STUDIOS LLC, Curt Schilling's video game development company, attempted to make a $1.1 million payment to the R.I. Economic Development Corporation late Thursday, but the EDC rejected the check when the company CFO said that there were insufficient funds to cover it.
Posted 5/17/12

(Updated May 18, 10:00 a.m.)

PROVIDENCE – 38 Studios LLC attempted to pay its overdue $1.125 million fee to the state late Thursday with a check the company admitted would have bounced, R.I. Economic Development Corporation officials said.

Executives from the video game design firm founded by former Red Sox pitcher Curt Schilling and lured to Providence with a state $75 million loan guaranty, also told EDC officials that they would be unable to make their next payroll.

After hearing that 38 Studios’ checks were no good, the EDC gave back the attempted payment and told the company to return when there was enough money in the company’s accounts to cover it, said Judy Chong, a spokeswoman for the quasi state agency.

“Upon learning from 38 Studios CFO Rick Wester that there would be insufficient funds, the EDC returned the check,” Chong said. “We remain willing to accept readily available funds.”

The $1.125 million guarantee fee, which is 1.5 percent of the outstanding loan amount, was due May 1.

After defaulting on the payment, 38 Studios asked the state for additional assistance, but the EDC took no action after a lengthy meeting and briefing from the company Wednesday.

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