Rhode Island Wonders If Bailing On 38 Studios Debt Is Doable

[Karloff]

Rhode Island Wonders If Bailing On 38 Studios Debt Is Doable

The Chaffee administration has said it ought to pay back the debt, but maybe the cost of not doing so is worth it.

38 Studios, of Kingdoms of Amalur: Reckoning fame, went out leaving a massive hole in the finances of home state Rhode Island [http://www.escapistmagazine.com/news/view/117785-Amid-Controversy-38-Studios-Declares-Bankruptcy-UPDATED], which Governor Lincoln Chafee has pledged to repay. It's not a legal obligation, his administration insists, but a moral one. Morals cost money, Chafee has discovered, and now his people are wondering just how awful the consequences would be if Rhode Island bailed on 38 Studios debt.

It's all about options, spokeswoman Christine Hunsinger said, and even if Chafee's position hasn't yet changed that "doesn't mean you don't analyze what the situation is, or gather data to understand the ramifications of what that decision would be." Currently the state is looking at paying back something in the region of $112.6 million over ten years. Although the state has filed a lawsuit [http://www.escapistmagazine.com/news/view/120456-Rhode-Island-Sues-Over-38-Studios] to recoup some of its losses, the likelihood of financing a significant portion of that debt using those means may not appeal as much to Chafee now as it did back in November 2012.

Before the lawsuit [http://www.escapistmagazine.com/news/view/119807-38-Studios-Specter-Haunts-Rhode-Island], Governor Chafee described the 38 Studios debacle as "an economic development crisis for the state of Rhode Island." It looks as though that crisis may be too much for Chafee to deal with, without compromising his moral position on debt.

Source: Providence Journal [http://news.providencejournal.com/breaking-news/2013/05/chafee-exploring-costs-of-not-paying-back-38-studios-bonds.html]


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[Andy Shandy]

Spoiler: Doable?

Sorry, been watching a lot of Scrubs recently

Seriously though, the whole 38 Studios thing is just one huge catastrophe. Which is a shame, because Kingdoms Of Amalur: Reckoning was quite fun.

 

[AntiChri5]

Just pass it on to the Feds, I'm sure politicians back there have connections to the big bank snobs. Remember Mr. Chaffee, it wasn't your money but the governments money, you have no obligation to pay it back.

In all honesty, I am somewhat surprised to hear a politician talk about morals and actually trying to stick to them.

Oh they love to talk about morals.

 

[Dr.Awkward]

And this is why you don't bribe a company in its infancy massive amounts of money just to come and provide jobs for your state, especially when it's a company that's not able to provide a wide range of those jobs of varying requirements. You made 38 Studios artificially grow in size with that money, but didn't have the structure nor experience to stay that size.

Sorry RI, but you should take the brunt of this one as an example for all the other states who's considered the same.

 

[FEichinger]

"We're gonna sue the living shit out of you so you pay us back, but we're not gonna give you the money we promised you."

At this point, I can not put any blame on 38S anymore. The Rhode Island government is just being a pain for some twisted campaign.

 

[Baresark]

He is just another politician that fucked shit up. A politician went back on the deal the state made with 38 Studios, the studio goes under long before they can pay the state back, so the state is responsible for Chaffee's mistake. When politicians fuck up, EVERYONE gets screwed, but at the end of the day Chaffee only looks slightly worse to his opponents and the state has to pay the debt that was essentially caused by Chaffee's decision. This is why states shouldn't try to create wealth, they don't have any idea what they are doing and they screwing with other people's money. Chaffee can die in a fire, as far as I'm concerned. OR better yet, he should be made destitute because that is what he did to people who worked and owned 38 Studios. There, moral quandary solved, Chaffee pays for his mistake in the same way his decision affected other people.

 

[Kuala BangoDango]

Too bad Mr. Chaffee's morals and belief in paying back debt didn't stop him from torpedoing 38Studios in it's attempts to remain solvent so that it, too, could finish it's next game and pay back it's debts.

Chaffee and RI were like the loan sharks who thinks a late payment isn't enough so they break the legs of the man and thus guarantees that, since the man can't work with broken legs, they'll now get NO payments. Apparently it's better to get $0 to "prove a point" than it is to budge by any degree on the amount or date owed in the hopes of getting eventually paid.

Well Mr. Chaffee...you forced 38 Studios under for failing to pay on time, maybe someone should do it to you and your state too. What's the term? Quid pro quo? Taste of your own medicine? He who lives by the sword dies by the sword?

That's the problem with being a debt-based economy. All it takes is for one person or company to fall and it starts a domino effect.

 

[Nielas]

"We're gonna sue the living shit out of you so you pay us back, but we're not gonna give you the money we promised you."

At this point, I can not put any blame on 38S anymore. The Rhode Island government is just being a pain for some twisted campaign.

Rhode Island gave them the money that was promised. The deal that ended up bringing the company down was over some tax credits that 38 Studios was trying to sell off in some sort of complicated deal. The money would have probably kept the company afloat for another month or two and then they would have needed another miracle.

38 Studios had no income stream since they already spent the advance money they got for Kingdoms of Amalur and would not get more royalty money unless the game sold more copies. They were heavily in debt to their suppliers and were at least half a year behind on some of their bills. The new game would not have been ready for a long time. No one would seriously loan them any more money so they engaged in a weird deal to sell of movie production tax credits that they were somehow eligible for.