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Curt Schilling, R.I. governor at odds over who's to blame for video game company woes

(AP) PROVIDENCE, R.I. - Rhode Island's governor said Tuesday that former Red Sox pitcher Curt Schilling is wrong to blame the state for any of his video gaming company's financial woes and to accuse the state of broken promises.

Gov. Lincoln Chafee disputed Schilling's assertion that he had damaged the company by making public comments about its financial troubles, telling The Associated Press that is "not accurate."

In his first public remarks on the company's problems, Schilling told The Providence Journal for Tuesday's editions that Chafee's recent remarks that the state was trying to keep his company solvent were "devastating." He said that shortly after those comments, a video-game publisher pulled out of a $35-million deal to finance a new game.

"The governor is not operating in the best interest of the company by any stretch, or the taxpayers, or the state," Schilling told the newspaper. "We're trying to save this company and we're working 24/7. The public commentary has been as big a piece of what's happening to us as anything out there."

Schilling also said the state promised and did not deliver film tax credits for 38 Studios and refused to allow the company to defer a $1.1 million payment to the Economic Development Corp., forcing it to miss payroll on May 15.

Curt Schilling's gaming company lays off staff

Chafee would not offer details about the tax credits but disputed Schilling's account. A message left for Schilling was not immediately returned Tuesday.

He also told The AP he's more interested in protecting Rhode Island taxpayers than in responding to Schilling's claims.

38 Studios, which was lured to Rhode Island from Massachusetts in 2010 with a $75 million loan guarantee from the EDC, laid off its entire workforce last week, including about 300 employees in Providence and more in Maryland. The state would likely be responsible for some of 38 Studios' debts should it collapse.

The firm's financial troubles came to light this month when it defaulted on a $1.1 million payment to the EDC that was due May 1. The company later paid — but only after first delivering a check that it acknowledged soon after would not clear.

Now the company is again violating its loan agreement with the state, Chafee said. Under federal law, employers who have at least 100 employees and plan to shed at least 50 jobs are required to give a 60-day notice to workers and state unemployment officials.

Bill Thomas, the 38 Studios president, told The Journal that the state was notified of the layoffs on May 25 because the company "wanted our employees to hear it from us first."

The 45-year-old Schilling said he stands to lose all the money he saved while playing baseball, and rejected criticism that he is seeking a public handout.

"I have done whatever I can do to create jobs and create a successful business, with my own income," he said. "Fifty million dollars, everything I've ever saved, has been put back into the economy. The $49 million from Rhode Island has been put back in the economy. I've never taken a penny and I've done nothing but create jobs and create economy. And so how does that translate into welfare baby? I've tried to do right by people."

Chafee has said he wants to help the company succeed, but opposes allowing 38 Studios to receive film tax credits after receiving so much in state bond proceeds.

Jonathan Savage, a business lawyer who is representing Chafee, said the state is willing to give up its first position to 38 Studio's assets if that will help attract a private investor.

Schilling said that might help, and he's hoping the company is not finished.

"I pray that it's not," he said. "We're doing everything we can do to make that not be the case."

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