Rhode Island would default on the money it owes for its failed investment in former Red Sox pitcher Curt Schilling's bankrupt video game company under a proposal being examined by lawmakers.
The House Finance Committee plans to review the idea Tuesday.
Several lawmakers have introduced legislation that would prohibit the state or its Economic Development Corp. from making any payments connected to the $75 million loan guarantee given to 38 Studios. Supporters say insurance on the bonds will pay bond holders should the state default.
But proposals to default face challenges in the General Assembly and are opposed by Gov. Lincoln Chafee, who says the state must honor its debts.
38 Studios filed for bankruptcy last year, leaving the state on the hook for some $100 million.