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Curt Schilling, wife defend 38 Studios over auditor report

Former Red Sox pitcher Curt Schilling fired back Friday at suggestions that his failed video game company put off Rhode Island auditors for days after 38 Studios LLC shuttered its operations in late May, while his wife lambasted Rhode Island’s governor, Lincoln Chafee, for his role in the company’s demise.

Curt Schilling, in his latest public comment about the collapse of his Providence start-up, posted a message on Facebook explaining that 38 Studios provided extensive information to the state and “didn’t stonewall anyone.”

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“This wasn’t us ‘balking’ at a 2nd audit,” Schilling wrote. “This was us balking at a third independent audit, after they’d already had two, received the summaries, been told everything was in order, and that there were no irregularities.”

He also accused the state of “trying to bully us and intimidate us on multiple fronts.”

Rhode Island, which offered 38 Studios a $75 million state-backed loan to lure the company from Massachusetts last year, launched a forensic audit in May to find out what happened to the money.

But 38 Studios was slow to give auditors access to the financial records after it let go all its workers on May 24, according to documents Rhode Island released under public records requests.

“I have no one here who could give you access to what you need for the audit,” company president Bill Thomas told one of the attorneys working for the state, David Gilden, on May 30.

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Christine Hunsinger, a spokeswoman for Chafee, said the public records show that “38 Studios was not a good partner. They were not communicative. They did not provide the information that was necessary.”

The Associated Press first wrote about the records on Thursday, sparking Curt Schilling’s response.

Schilling’s wife, Shonda Schilling, posted a note on her Facebook account “for all the media out there using the Schilling name for a headline everyday.”

Shonda pointed out that her husband invested $50 million into 38 Studios, repeating what he has said. She said the company employed 300 employees in Rhode Island, who lived, shopped, and ate in the state.

But she said Chafee, who had opposed the company’s loan guarantee, was quick to blast the company and publicize its financial problems. Curt Schilling has blamed the governor’s comments for helping speed the company’s demise.

“I was there for those three weeks of hope and hell,” Shonda wrote. “My husband [was] so distraught he couldn’t function. NOT because he had lost it all but because that team worked SO hard and believed in what they were doing.

“They loved their job and they loved Rhode Island,” she wrote. “BUT everyday Gov Chaffee [sic] at exactly 4 oclock would have a press conference.”

She said Rhode Island wound up with “a 110 million dollar ‘I told you so’ from your beloved Governor,” referring to how much the company had invested in its next game being developed in Providence.

Records obtained by the Globe also showed that 38 Studios executives privately blasted Rhode Island officials for publicly sharing details about the company’s financial troubles. In a May 17 e-mail, the company’s vice chairman Thomas Zaccagnino, complained that the state breached its “confidentiality agreement” with the firm by telling reporters that 38 Studios didn’t have enough money to meet its payroll that week. Company workers later confirmed they weren’t paid on May 15.

Chafee has repeatedly said he wanted the company to succeed, even though he had opposed the state loan guarantee. The governor said he was hesitant to approve the company’s request for millions of dollars in tax credits and other aid because he had an obligation to protect taxpayers from further losses.

The company released one game, Kingdoms of Amalur: Reckoning, in February and was developing a massive online role-playing game code named Copernicus that wasn’t expected to be finished for another year. Video game analysts have speculated that 38 Studios failed because the game took more time and money than originally planned, and 38 Studios wasn’t able to raise enough outside capital to keep the company going.

Schilling has said he invested his personal fortune into 38 Studios and didn’t have any money left to keep the firm afloat. The firm filed for Chapter 7 bankruptcy last month, the first step to liquidating the company. A bankruptcy meeting with creditors is slated to be held next week in Delaware.

Todd Wallack can be reached at twallack@globe.com. Follow him on Twitter @twallack.

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