38 Studios Pays Off $1.125 Million Payment, Buys Itself Some Time
Last week, 38 Studios was in some pretty deep water. The developer had failed to pay a $1.125 million fee to the Rhode Island Economic Development Corporation, and when it finally tried to pay the fee, they had the check recalled because of an apparent lack of funds available to cover it. Now it seems that the company has bought itself some time, as the company delivered a check to the state on Friday and said check cleared.
The next large-scale payment that 38 Studios will need to make will be due on November 1st to the tune of $2.6 million. While that gives them some time to earn some revenue, they’ll have to look outside of the Rhode Island government for it, as the governor Lincoln Chafee told them that “it’s time for them to go out and get private capital funding”. Also as a result of all this madness, the state is changing its legislation on tax breaks, as they look to close loopholes pertaining to state funds being used for motion picture endeavors. That’s what got everybody in this mess in the first place, and they don’t want it happening again.
The company is still in pretty weak position. Last week, it had to suspend pay for its employees, and as of yet there’s been no word that they’ll be able to pay their employees this week. Hopefully the company will get some help soon and start making money, because if it doesn’t Rhode Island will be on the hook for a $75 million loan until 2020.
