"38 Studios default would sink R.I. bonds, report says" by Erika Niedowski | Associated Press May 10, 2014
PROVIDENCE — Defaulting on the debt related to 38 Studios’ bankruptcy would sink Rhode Island’s bond rating to junk status and could harm the state’s overall business climate, an independent analyst predicted in a report released Friday.
Bankers and government must get paid.
The report from Minnesota-based SJ Advisors said default would bring increased borrowing costs and harm to the state’s reputation, and could lead to a ‘‘contagion effect impacting other Rhode Island issuers and even taint the business environment.’’
The firm believes the most likely scenario with a default would have the state paying nearly $126 million more than the cost of honoring the debt. Even under the best-case scenario, the state would pay $36 million more.
That's why I never want tax money going for bu$ine$$ ventures.
The General Assembly called for the outside analysis last year as it reluctantly approved the first payment, from state funds, to bondholders who financed the 38 Studios deal. The $2.4 million payment was due May 1.
Like I have been typing for years, banks and investors get first cut of the tax loot no matter what state you live.
But some lawmakers say taxpayers should not foot the bill for what was a colossally bad transaction.
They have been pushing default on the remaining $87 million that Rhode Island owes under the deal that gave 38 Studios a $75 million state-backed loan.
The loan was financed by so-called moral obligation bonds, for which there is no legal repayment requirement.
And yet the R.I. House just "reluctantly" voted one. $hows you who has the power in the Rhode Island $tate house.
Senate President Teresa Paiva Weed, Democrat of Newport, said Friday the state should honor the debt.
‘‘The responsible course of action is to repay the state’s obligation while pursuing litigation and every means to recoup costs on behalf of the taxpayers,’’ she said in a statement.
:-(
When Democrats are in thrall to bankers....
The state’s economic development agency is suing 38 Studios founder and former Red Sox pitcher Curt Schilling and others over the collapse of his video game company.
Related(?): The Schilling Curse?
I feel bad for Curt, although it comes with caveats. He's been cleaned out for trying to do the right thing (start a business) and no one deserves cancer; however, one must remember he was a big Bush supporter when he was making millions with the Sox. Now he is finding how the rest of us live. I can't imagine part-time work on ESPN is bringing in that much.
It says the board was misled into approving the deal that helped lure the company from Massachusetts to Providence.
House Speaker Nicholas Mattiello, a Cranston Democrat, has not yet taken a position on repaying.
‘‘This report provides House members with some good information that will help us to formulate a fact-based decision on the bond repayment,’’ he said in a statement. ‘‘The report will be considered, along with the examination of various aspects of this issue by the House Finance and Oversight committees.’’
John Simmons, executive director of the business-backed Rhode Island Public Expenditure Council, testified before House Oversight on Thursday that a default would cost the state more than the 38 Studios debt.
The state is paying up to $75,000 for the SJ Advisors report.
(Blog editor shakes head and snorts)
--more--"
Also see: Official won’t testify in Schilling case
Ah, the days of carefree video game playing after waking up.....
Other breakfast bites from Rhode Island:
Prognosis is unclear for acrobats
Circus says condition of two acrobats upgraded to fair
Circus thanks Providence for its support after accident
Related: Circus Trick Turns to Tragedy in Rhode Island
"R.I. housing deputy says she was fired over probe" by Erika Niedowski | Associated Press December 21, 2013
PROVIDENCE — The former deputy director of Rhode Island Housing contends that she was wrongfully fired this week because she wanted to probe possible financial irregularities involving federal funds at the Urban League of Rhode Island.
Gayle Corrigan has asked the quasi-public housing agency’s board to investigate her termination.
Michael Milito, deputy assistant director of Rhode Island Housing, said the agency does not comment on personnel matters.
Corrigan was reviewing housing grants to the Urban League for its operation of the Safe Haven homeless shelter in Pawtucket after learning from staff of ‘‘allegations of financial irregularities,’’ according to a statement she released Thursday. The Providence Journal reported this month on problems at the shelter, including employees not being paid for months, a lack of heat, and other issues.
At least it isn't a slum like up in Bop$ton.
Corrigan said that after a financial review and a visit to Safe Haven, she and staff recommended that Rhode Island Housing assume responsibility for the grant and shelter operations.
She also recommended that ‘‘law enforcement be contacted and the US Department of Housing and Urban Development be made aware of their findings and observations.’’
Corrigan maintains she was terminated without cause Monday ‘‘mere days after raising concerns about those financial irregularities involving federal money.’’ She said she had just gotten a six-month review from executive director Richard Godfrey in which he said he was pleased to have her as his deputy and approved her for permanent employment.
A message was left Friday for Urban League president and chief executive officer Dennis Langley. He told the Journal Thursday that there was never any misappropriation of funds and that his organization did not meet payroll because it lacked the money. Rhode Island Housing has not provided the Urban League with any money since September, he said.
Corrigan was hired at Rhode Island Housing earlier this year after serving as chief of staff for the state-appointed receiver in Central Falls during its municipal bankruptcy.
It's the rise and fall of Central Falls.
--more--"
I'm sorry, government, but I believe her -- especially when it is buried at the bottom on the second-to-last page of my paper four days before Christmas.
