R.I. GOP Chair: Default on 38 Studios Bonds, Insurers Will Pay Bondholders

June 5, 2013

Rhode Island’s Republican Party chairman has joined the call for the state to default on the money it owes for its failed investment in former Red Sox pitcher Curt Schilling’s bankrupt video game company.

Mark Smiley said Tuesday that taxpayers shouldn’t have to pay the more than $100 million the state owes bond holders on the 38 Studios deal. He says insurance on the bonds will pay bondholders if the state defaults.

A small number of state lawmakers support defaulting, and lawmakers on the House Finance Committee on Thursday will review the implications of not paying the money.

The budget proposal before the General Assembly includes a $2.5 million bond payment next fiscal year.

The proposal is opposed by Gov. Lincoln Chafee, who says the state must honor its debts.

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