PROVIDENCE — Curt Schilling’s video gaming company had already taken the first step toward filing for bankruptcy by the time Governor Lincoln Chafee made his first public comments about 38 Studios’ troubles — remarks the former Boston Red Sox pitcher has blamed for his company’s demise, documents show.
A confidential memo obtained by The Associated Press under a public records request shows the 38 Studios board had given the company the green light to seek bankruptcy protection sometime on or before May 14, the same day Chafee first spoke out about its financial troubles.
Schilling has blamed Chafee for worsening the company’s financial situation with his public comments. The company, lured to Rhode Island from Massachusetts in 2010 by a $75 million loan guarantee approved by a state agency, laid off its entire workforce in Rhode Island and Maryland last month and filed for Chapter 7 bankruptcy protection on June 7.
As a candidate for governor, Chafee, an independent, opposed the deal with the Economic Development Corporaton.
The decision by the 38 Studios board to let the company seek bankruptcy protection is detailed in a May 14 memo to development corporation board members from the agency’s then-executive director, Keith Stokes, who has since resigned. The memo was written two weeks after 38 Studios missed a $1.1 million payment to the Economic Development Corporation. The company later made the payment.
‘‘EDC has been informed by 38 Studios that it is also unable to make this week’s payroll for its employees, and consequently its board of directors has authorized it to file for bankruptcy protection,’’ Stokes wrote. ‘‘Unless something changes today, we expect 38 Studios to file for bankruptcy as early as today.’’
The same day Stokes wrote that memo, Chafee said he was trying to keep 38 Studios ‘‘solvent.’’ 38 Studios owes $150.7 million and had assets of $21.7 million, according to bankruptcy filings. An affiliate, 38 Studios Baltimore, owes more than $121.4 million and has assets of more than $335,000.