Rhode Island sues Schilling over failed 38 Studios deal
(Reuters) – Rhode Island is suing former Red Sox pitcher Curt Schilling and the former head of the state's economic development agency over a $75 million loan guarantee the agency made to the baseball player's failed video game company 38 Studios.
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EDC, a quasi-state agency, made the loan in 2010 to lure Schilling who was promising to bring 450 jobs to the economically depressed state from neighboring Massachusetts. The deal was brokered by Donald Carcieri, the state's governor until January, 2011.
38 Studios filed for bankruptcy in June leaving the state's taxpayers responsible for repaying roughly $100 million, with interest included, to private investors who had bought the bonds the state issued on behalf of the company.
The suit charges that some of the defendants committed larceny and permitted the video game company to rely on financial assumptions that were based on "known false assumptions".
Zero Hedge's take on the story:
Curt Schilling Sued Over Misappropriated $75 Million Rhode Island Development Agency Loan
Submitted by ZeroHedge
Doping cyclists, UK banks which manipulate every possible thing they are involved with, and now embezzling one-time baseball millionaire greats with bloodied socks… Is nothing sacred anymore?
The state of Rhode Island has filed a lawsuit against former Red Sox pitcher Curt Schilling and one-time officials with the state's economic development agency in connection with a $75 million loan guarantee to his failed video game company.The suit was filed Thursday in Rhode Island Superior Court. In addition to Schilling, who founded 38 Studios, it names the former executive director of the Economic Development Corp., Keith Stokes, and another former EDC official who worked closely on the deal.
Gov. Lincoln Chafee (CHAY'-fee) said in a video message the EDC board took the legal action to try to "rectify a grave injustice put upon the people of Rhode Island."
A spokeswoman for the EDC said the agency has no comment.
But at least consider the benefits: the loan did goose US GDP by $75 million on at least one occasion: after all it was almost efficiently allocated government funding. And everyone knows that that never goes to waste…
