The Timeline of the Implementation and Failure of the Loan Guaranty to 38 Studios Prepared for the House Oversight Committee October 27, 2015
Document One: Nondisclosure Agreements Importance: Shows that Gordon Fox and Who : Gordon Fox, William Murphy William Murphy had contact with What: List 38 Studios as early as 10/08/2009 When: October 8, 2009 Notable: Michael Corso also signed a Summary : An accounting of nondisclosure agreement on the same day . nondisclosure agreements
Document Two: Meeting at the State House Who : William Murphy, Gordon Fox, Importance: Early meeting involving Curt Schilling, Tom Zaccagnino, Fox, Corso and 38 Studios and Fox Michael Corso leadership. What : Deposition When: Fall 2009 Notable: Murphy, unaware of the meeting, stopped in Fox’s office to Summary: Fox, Schilling, Zaccagnino, say good night and Murphy was and Corso meet in the State House, asked to arrange a meeting with Murphy stops in. Schilling and the Massachusetts House Speaker.
Document Three: Fundraiser at Curt Schilling Home Importance: This the first meeting of Who : Gordon Fox, Donald Carcieri, Curt Carcieri and Schilling. Schilling told Schilling Carcieri about his company and the What : Emails potential to move it to Providence. When: March 2, 2010 Notable: EDC board members Karl Wadenstein, Shivan Subramanian Summary : Curt Schilling held a and Paul Choquette were also on the fundraiser for a documentary and list. There was no evidence in the invited Carcieri and Fox. depositions or exhibits that any of the board members attended.
Document Four: Schilling and EDC Meet Who: Michael Corso, Tom Zaccagnino, Importance: This is a record of the early Schilling, Stokes, Fox meetings with the EDC and 38 Studios. It is also important to note What: Email that Stokes cc’ed Gordon Fox on his When: March 17, 2010 email. Summary: Stokes sets up second Notable: Schilling appreciates “the time meeting with Schilling, includes and effort already provided by the Rob Stolzman and Michael Saul. state of Rhode Island, from the speaker on down.”
Document Five: Stolzman pitches real estate Who: Rob Stolzman, Michael Corso Importance: Early edits to term sheet. What: Email When: March 26, 2010 Notable: “I’d love to show you and whomever from 38 Studios the building. If I can be helpful with this Summary: Stolzman pitches building it would be great to help a company owned by his inlaws to Corso for 38 and my in-laws.” Studios offices.
Document Six: Early Term Sheet Who: Zaccagnino, Corso, Stolzman, Importance: Marked up edits to early Stokes term sheet. What: Email When: March 26, 2010 Notable: “Job Training Grants and Credits of up to $5,000 per year per Summary: Stolzman thanks Corso for employee will be made available” the comments on the draft term This was not in the final term sheet. sheet.
Document Seven: Visit to 38 Studios Who: Rob Stolzman, Mike Corso Importance: Early term sheet, working to include legislative leadership. What: email When: March 28, 2010 Notable: Also confirming EDC staff will be visiting Maynard. “I think Mike Summary: Early discussions of term Saul and I are the only two attending sheet. Stolzman is checking with from the RIEDC.” Corso to see if Gordon Fox is visiting Maynard the next day.
Document Eight Early discussion of legislation Who: Rob Stolzman, Stokes, Hashway, Importance: Decision to include Saul program in the FY 10 supplemental budget. What: Email When: March 31, 2010 Notable: “Gordon and Steve C want to put the “moral ob program” in the Summary: The Jobs Grown Guaranty FY’10 supplemental budget, which Program will be included in the FY currently might be heard as early as 10 supplemental budget. next week.” “Gordon and Steve see this as a ‘digital media’ industry program with $75 of $125 ‘committed’ to 38 Studios and the rest to be worked out on…”
Document Nine: Early due diligence planning Who: Michael Saul, Michael Corso Importance: Saul wants a walk-through of the company projections. What: Email When: March 31, 2010 Notable: Also looking to discuss “feasibility on Big Huge/EA Summary: Planning early due diligence projections.” meeting.
Document Ten Memo updating governor Who: Rob Stolzman, Keith Stokes, Importance: In his memo to the Michael Saul, Fred Hashway governor, Stokes acknowledges that What: Email the company need $75 million in When: March 31, 2010 addition to the equity already committed to complete both the RPG and MMOG. Summary: Email with memo to governor and draft Kushner and term sheet attached. Notable: Stolzman notes that he will be under pressure to circulate drafts from Chairman Costantino and Michael Corso.
Document Eleven Stolzman email to governor’s office Who: Robert Stolzman, Andrew Hodgkin Importance: Updating governor’s office What: Email on legislation and term sheet When: April 1, 2010 Notable: “ at the suggestion of House Summary: Stolzman sends memo to Finance Chairman Costantino, the Hodgkin with an update on Kushner draft reflects a larger legislative process authorization for this as a Job Creation Guaranty Program”
Document Twelve Scheduling hearing on JCGP Who: Stolzman, Costantino, Stokes Importance: April 6 hearing is scheduled and tied to 38 Studios request. What: Email When: April 2, 2010 Notable: “Assuming the due diligence checks out as we hope it will, the Summary: Chairman schedules hearing entry fee for this opportunity for RI on EDC issues to include JCGP is relatively low since it is based on credit enhancement rather than direct loans, grants, tax credits or tax reductions .”
Document Thirteen JCGP will be in Supplemental Budget Who: Keith Stokes, Michael Saul, Importance: Stokes believes the speaker Robert Stolzman, Fred Hashway directed the chairman to include the What: Email JCGP in the budget. When: April 2, 2010 Notable: “I will speak with Gordon and Summary: Costantino let Stokes know Mike Corso tonight with a request that JCGP will be in the that we may not go the supplemental supplemental budget. Stokes is budget route…. The question is, will concerned it is too soon. a month + delay lose the interest 38?”
Document Fourteen Stokes Memo to Board Who: Keith Stokes, EDC Board Importance: Stokes informs the Board about the JCGP program, does not What: Email include any information about 38 When: April 5, 2010 Studios. Summary: Stokes sent memo on JCGP Notable: “The General Assembly has to the EDC Board asked us to propose a program that would respond to the need for credit enhancement in these growth areas and at these levels .”
Document Fifteen Stolzman Handwritten notes Who: Robert Stolzman, Fred Hashway, Importance: Notes that Wells will = Michael Corso, Tom Zaccagnino validation for due diligence. and two others What: Handwritten notes from meeting Notable: “We need to talk to Steve with EDC and 38 Studios Costantino … let 38 studios use When: April 6, 2010 other available tax incentives for building” Summary: Meeting planning due diligence.
Document Sixteen Supplemental budget Who: Keith Stokes, Michael Corso Importance: Stokes asks Corso, not EDC staff, to contact the speaker to What: Email be sure the JCGP is in the When: April 7, 2010 supplemental budget. Summary: Email about supplemental Notable: “You may want to contact budget. Gordon to make sure our article is placed in the supplemental budget”
Document Seventeen Term Sheet Draft Importance: In this early draft forwarded Who: Michael Saul, Maureen to Gurghigian, an independent Gurghigian financial review is a condition to What: Email closing the loan. When: April 8, 2010 Notable: “ b) An independent financial review and analysis of the Summary: Early draft of term sheet company’s financial projections; current contracts and obligations with gaming industry partners such as EA; and any other related or requested documents or information of the company.”
Document Eighteen Recommendation of Wells for underwriting Who: Saul, Corso, Stolzman, Hashway, Importance: Saul discusses Wells Stokes presentation. What: Email When: April 9, 2010 Notable: “Wells understands that they will need to convince the EDC board that 38 Studios business Summary: States need to get Wells on model and projections are what will state underwriter list. sell the bond vs. credit enhancement.” “ One issue that will remain a challenge is the amount of the bond moral obligation as a % of the total program. The amount is around $85 million as a result of the gross up for the deferred P & I period, plus a reserve plus fees ”
Document Nineteen Meeting at 38 Studios Who: Robert Stolzman, Steve Lane, Importance: Lane states that he and Michael Corso, Tom Zaccagnino, Verrechia were the only board Curt Schilling, Jen Maclean, Fred members invited to meeting. At the Hashway meeting Stolzman notes the company needs between $75 million What: Meeting notes, deposition and $100 million. When: April 9, 2010 Notable: Stolzman notes $85 million Summary: Notes of meeting at 38 (gross up) for 450 jobs equals Studios and Lane’s deposition . $170,000 per job.
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