In yet another update on the Billy Corgan vs. TNA Wrestling lawsuit, Corgan’s response to TNA Wrestling’s claims was filed with the Chancery Court this morning, according to a report from PWInsider.com who note that this provided additional insight into TNA’s defense and that in that response, Corgan stated that “Defendants first attempt to portray Corgan’s complaint and application for injunctive relief as nothing more than a back-handed grab for power”, to which Corgan responded that he has great passion for TNA Wrestling’s talent and fans and that the last thing he wanted to do was file suit, but he had done everything he could to avoid litigation and said that he was forced to file the suit due to the defendants’ “repeated willful disregard of their contractual obligations to him” and that documents TNA and others produced on their own “demonstrates that defendants have been engaging in an orchestrated effort” to deprive Corgan of those contractual rights.

The report notes that Corgan noted that the defendants then argued that his application for an injunction should be denied because they “have secured financing to pay Corgan the full amount to which he is entitled”, to which Corgan responded that is false and that “defendants have merely obtained a proposal for financing a portion of the amount Corgan is due and that financing proposal is premised upon conditions that cannot be fulfilled, named obtaining a release from Corgan that is not obligated to provide and will not provide for various reasons”. Corgan’s response also notes that the defendants are arguing that the provision in his signed agreement with Dixie Carter that would allow him to exercise her voting rights in IMPACT Ventures is invalid under the Tennessee Revised Limited Liability Company Act and IMPACT Ventures’ Operating Agreement, to which Corgan responded that the defendants are mistaken and explained that a provision in the agreement allowing him to exercise Carter’s rights is the same as a voting proxy, which is “expressly permitted by the Act” and not prohibited by the company’s Operating Agreement, while it is also noted in the response that the defendants are arguing that IMPACT Ventures is not insolvent, while Corgan, noting that the Chancery Court allowed limited discovery, stated that during that discovery period, documents that the defendant produced actually “demonstrate that IMPACT Ventures is insolvent under any of the applicable tests” and claimed that the defendants have attempted to provide “circumstantially” that IMPACT Ventures is solvent based on a “jaundiced view of certain investment and asset purchase proposals” and that “even so, IMPACT Ventures’ true debts are higher than any value of its assets even suggested by that circumstantial evidence, thus, it is clear that IMPACT Ventures is insolvent and that Corgan is entitled to exercise Mrs. Salinas’ voting rights in the company”.

The report notes that the response also noted that the defendants have attempted to brand Corgan as a “predatory lender” with “strong arm loans” and that Corgan responded that he took the risk of investing significant sums into IMPACT to save it from being shuttered and negotiated at arms-length to contract terms which all parties knowingly and voluntarily agreed to and is now seeking to prevent the defendants from reneging on their promises to him and noting that adding insult to injury, the documents the Court ordered defendants to produce demonstrate that defendants misled Corgan every step of the way and that the filings include a quote from TNA’s Chief Financial Officer Dean Broadhead who stated, “without the Corgan funding, all would have been lost”. Meanwhile, in regards to his appointment as IMPACT Ventures’ President, Corgan stated that had he not been given that appointment, he never would have agreed to continue loaning the company money, because he believes that Carter and the other managers of the company had “driven the company into the ground”. Corgan also notes that documents produced by the defendants show that they never had any real intention of recognizing him as the company’s President in charge of the operations, noting that an e-mail between the defendants and Anthem Media noted, “Mr. Corgan may have an agreement providing him with a title, but in the absence of a document delegating authority to him, it is a vacuous appointment”. Corgan noted that he is still waiting to be provided with “even an initial draft” of the employee agreement for him as President for his own consideration.

The response also noted that Corgan and the defendants agreed that Corgan had the right to convert his investment in the company into a 36% ownership stake or that he would receive an additional premium should the company engage in Corporate Transaction and claims that all of those rights were based on the defendants repeated representations to him in order to get him to invest initially and then continue to invest in the company and reiterated that the company had breached its agreement with him by keeping him in the dark about negotiations with third parties and cites that on September 26th, 2016, he was told that allegations that the company was speaking with WWE was absolutely not true, when just the day before on September 25th, Broadhead himself had sent a representative of WWE certain due dilligence material that WWE had requested and that in another citing, it is noted that WWE raised issues about Corgan’s note over the course of the WWE negotiations, which led to Dixie Carter responding that she intended to pay the loan back in full, plus interest, prior to selling the company. Corgan again argued that he should be able to take control of Carter’s interest in IMPACT Ventures because the company is insolvent, noting that it took on additional debt to produce the TNA Bound For Glory pay-per-view and television tapings and that it had become apparent to Corgan that defendants were never going to allow him to participate in the management of the company, as promised, and were attempting to cut deals to sell the company or its assets behind his back and noted that he then elected to exercise his unconditional right to Carter’s interest in the company and replace its managers in order to protect not only his own rights as a significant creditor and potential member of the company, but also the interest of IMPACT Ventures and its employees and independent contracts and that in producing proof that the company is indeed insolvent, Corgan notes that the company’s financial condition significantly deteriorated after August 11th, including the following:

– The aforementioned American Express lawsuit, Audience of One and Bankcredit Capital Finance lawsuits.

– The company being in such “dire straits that it was unable to pay officers’ salaries” as of August 31st, 2016. It specifically noted that Dixie Carter and Serg Salinas are owed in back pay.

– As of September 1st, 2016, “checks issued to talent bounced”, with Dean Broadhead stating in one document, “We owe talent money. We owe employees money. we (sic) many vendors money.”

– As of September 8th, 2016, IMPACT Ventures was unable to pay its state taxes, leading to the tax lien.

– As of September 8th, 2016, the company’s operating account was overdrawn by [redacted] yet the company had trade accounts payable totaling at least [redacted.]

– As of October 3rd, IMPACT Ventures was unable to pay vendor “Seismic Sound” a redacted amount, leading them to threaten collection actions.

– The aforementioned tapings that were postponed on November 1st-November 3rd.

– The defendants not paying talent and blaming Corgan and the temporary restraining order for not paying them and that, although not dated, it is also noted that the company owes money to a “SRX Consultancy.”

Corgan noted that although expressly stated, defendants also appear to argue that they can continue to dig the company deeper and deeper into a financial hole by obtaining additional debt to fund their operations and noted that even after they secured a loan from MCC Acquisitions in September, that it was not able to finance its production of tapings in October and also avoid the plethora of collection lawsuits and the tax lien and that simply put, it defies logic to assert that IMPACT Ventures can somehow make itself solvent by becoming more and more insolvent and that in arguing that the company’s assets do not exceed a redacted amount that proves that the company is insolvent, Corgan argues that the defendants have not provided the Court with any direct evidence of the value of their assets and that instead, defendants only offer weak circumstantial evidence in the form of investment and asset purchase proposals from Corgan and WWE, to which Corgan argues that evidence does not even come remotely close to proving the company is solvent and argues that the items the defendants are using as their crutch in the argument are simply proposals and none of them represent a firm offer that defendants could accept, while a letter dated June 4th, 2016 from WWE stated that it was a non-binding indication of interest for discussion purpose and also noted that an unsigned draft of a non-binding purchased agreement did not explain why WWE reduced its initial proposal down, with the numbers redacted. Corgan notes that again, he was never told the true nature of the company’s debts and that it is unclear if the company ever advised WWE what the levels of IMPACT Ventures’ debts were in September 2016 and that if defendants falsely represented to WWE that the company’s liabilities were only a redacted amount as stated in the June 30th, 2016 balance sheet, then the evidentiary value of any offer WWE may have made would be even more dubious.

It was noted that in their agreement with Corgan, that the company would repay Corgan’s loan to them by November 1st, 2016 and that therefore, Corgan’s claims should be denied, to which Corgan noted that the note has not been paid and it is doubtful that it will be paid in a timely maneer because IMPACT Ventures, by its own admission, does not have the money to do so and noted that while the claim is that Anthem has agreed to pay IMPACT’s note to him via an investment of funds, Corgan has not been provided with any documents other than a key terms sheet that requires he agree to be a full release of claims against the company and that Corgan has made it clear that he will not agree to those terms and also argued that they are representing him as simply a creditor, when he is not someone just owed a debt, but someone with the right to either demand payment or convert his debt into a 36% membership of the company and noted that in an agreement from Anthem to invest money into the company, the agreement would see Anthem replace Aroluxe as the top secured creditor in the company and see Anthem repay Corgan’s loss and Aroluxe agree to be obligated to produce each show for the October and January television tapings at a reduced price and that the agreement would also result in Anthem receiving 85% of the company, Aroluxe receiving 10% of the company and Jason Brown of Aroluxe being named the CEO of IMPACT Ventures for a term of three years, meaning that it would appear that the final 5% would remain with Dixie Carter. Corgan is claiming that all documentation strongly supports his claim that they have all entered into an agreement withouth his involvement or knowledge and given that would constitute a Corporate Transaction, argues that he is owed more than just his investment and that everyone involved have colluded to delay the actual signing of their agreement until he is out of the picture so that he does not get the premium payment, alleging that the company was working to defraud him of money that he would be contractually owed.