The Nashville Chancery Court, in a ruling today, has denied Billy Corgan’s request for a temporary injunction against TNA Entertainment LLC, IMPACT Ventures LLC, TNA Wrestling Chairman Dixie Carter-Salinas, her husband Serg Salinas and TNA Wrestling’s Chief Financial Officer Dean Broadhead, according to a report from PWInsider.com who note that the court also dissolved Corgan’s temporary restraining order against the company.
In the ruling, Chancellor Ellen Hobbs Lyle wrote that she denied Corgan’s request for several reasons and noted that in order for Corgan to be entitled to a temporary injunction under Tennessee law, he has to show a substantial likelihood of success on the merits of his claim, immediate and irreparable harm, a balancing of the equity in the company in his favor and that issuing the injunction would not be harmful to the public interest. The court however noted that Corgan did not prove that TNA’s defense is without merit, that a default actually happened under the Pledge Agreement between himself and Dixie Carter-Salinas and that such a default would rightfully mean that Corgan could gain control of Carter’s voting rights and that the amount owed and payable to Corgan has increased due to a corporate transaction, meaning that due to the court not being in 100% agreement with Corgan’s claims, they refused to file the injunction against Carter and the others. The court also agreed with TNA’s attorneys when they argued last week that the Voting Rights Provision of the Pledge Agreement between Corgan and Carter was not implemented in accordance with Tennessee law, therefore it was unenforceable and Corgan could not remove Dixie Carter and the other IMPACT Ventures management members.
In regards to TNA’s parent company IMPACT Ventures being insolvent, Chancellor Lyle noted that there has not been demonstrated, a likelihood of success on the merit, because of the operative text of the Pledge Agreement ‘becomes insolvent’ is ambiguous when applied to the fact of record. The report notes that it was noted in the response that the court does not adopt TNA’s argument that the potential money coming in from potential purchasers to buy the LLC or some of its assets refutes the facts and insolvency standards that Corgan presented and noted that because of the unique facts of his case, the usual process that Corgan used and that the court itself might use did not apply. It was noted that all parties entered into the Pledge Agreement because TNA had financial issues and therefore it is hard to define that the company had become insolvent, because the company was already in financial trouble and distress when Corgan stepped in and TNA’s Chief Financial Officer Dean Broadhead stated on the record that without Corgan’s help, all would have been lost. Chancellor Lyle stated that the context of facts of the LLC’s financial distress at the time the insolvency default provision of the Pledge Agreement was entered into by the parties in August 2016 creates an ambiguity about the meaning of the text of the provision that a default occurs under the Pledge Agreement ‘if’ the LLC ‘becomes insolvent’, meaning that the court is stating that Corgan can’t prove that TNA is insolvent now, because the company was in such bad shape that they entered into the agreement with him and that there is no way, to truly prove that they are worse off now than what they were in August because of the wording of the agreement.
The report goes on to state that it was noted that it is not clearly established on the record that the Defendants have breached their agreement with Corgan by withholding or concealing information and noted that Corgan has a version of the facts and TNA has another and that there is no clear proof at this juncture as to which side is correct and noted that Corgan may be able to win at trial if he provides the proper evidence, but at this point, he can’t provide hard proof that they breached his agreement. The court also ruled that the preliminary evidence filed on record that does not prove that there has been an acquisition of TNA and it’s parent company by another party, meaning there is no current reason for Corgan to be owed the additional Corporate Transaction fee, which is believed, based on statements made in open court last week, to be an additional $900,000.
For those wondering where things officially stand, Corgan is still free to go forward with his lawsuit, as that is not dead in the water, while TNA Wrestling are also still required, contractually, to pay Corgan back his loan of $1.8 million tomorrow. What this now means is that Corgan will not gain control of TNA Wrestling and that the current management can officially move forward with whatever choices and business decision they desire without his approval. Corgan still has the option to convert the money owed for his loan into a 36% ownership stake in the company.