Bloomberg News drops long article on RI’s 38 Studios lawsuit

December 5th, 2012 at 5:00 am by under Nesi's Notes

Michael MacDonald reports for Bloomberg News:

Schilling conspired with Wells Fargo & Co. (WFC) bankers and other advisers to persuade the state to loan the company $75 million, knowing it wouldn’t be enough to finish development of Project Copernicus, a new game, according to the civil complaint brought in Rhode Island Superior Court. The deal won approval in July 2010. By May 2012, 38 Studios went bankrupt, leaving taxpayers on the hook for the loan. …

The collapse left almost 400 people out of work, including 300 in Rhode Island. It shows the risks confronting states and cities in doling out corporate incentives, which amount to about $70 billion a year, according to Kenneth P. Thomas, who teaches politics at the University of Missouri-St. Louis. …

Bonds maturing in November 2015 were the most recently traded among securities tied to the deal. The debt yielded 4.27 percent Oct. 15, compared with 6 percent when issued two years ago, according to data compiled by Bloomberg.

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