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38 Studios paying state back by not paying employees

Eliot Lefebvre
05.17.12
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If you're familiar with the phrase "robbing Peter to pay Paul," you'll understand the latest episode in the ongoing 38 Studios financial crisis. Except replace "Paul" with "the state of Rhode Island" and "Peter" with "the company's employees." Yes, in order to make the most recent payment to the state that sparked this whole crisis, the Rhode Island Economic Development Corporation has been informed that Curt Schilling's company is paying the state but not paying any of the company's employees. According to anonymous sources, all temporary employees and contractors have also been terminated.

While this measure might help forestall immediate action, the company is still on the hook for a $75 million loan, and Rhode Island governor Lincoln Chafee has made it clear that the company is looking for more assistance from the state in order to remain viable. 38 Studios continues to make no public statements at this time. We'll no doubt have more on this story in the coming days as it continues to develop.

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