In an update on the lawsuit filed by TNA Wrestling President Billy Corgan against TNA Entertainment LLC, its parent company IMPACT Ventures LLC, TNA Wrestling Chairman Dixie Carter-Salinas, her husband Serg Salinas and TNA Wrestling’s Chief Financial Officer Dean Broadhead, The Nashville Chancery Court unsealed IMPACT Ventures’ response to Billy Corgan’s lawsuit yesterday afternoon, prior to the hearing, according to a report from PWInsider.com.

The report notes that in the lawsuit, TNA Wrestling stated that Corgan owns no interest in IMPACT, but had loaned money to the company and used that loan to strong-arm the company into giving him the title of President and claimed at the time Corgan filed his lawsuit, he had 20 days remaining as a lender to the company and with time running out on his loan and with replacement financing imminent, alleged that Corgan declared a non-monetary default under the Pledge Agreement he signed with Dixie Carter and stated that he then purported to use her voting power to terminate the other defendants from the company in order for Corgan to install himself as the company’s sole owner, while arguing that Corgan’s claim to voting and control is solely through the Pledge Agreement, but that would terminate upon re-payment of his loan and state that in the lawsuit, Corgan is well aware that IMPACT has a new funding source ready, willing and able to pay Corgan the principal and interest due from his loan. It was also stated that Corgan is trying to use this illusory default and managerial control, along with the power of the Court, to prevent TNA from being able to repay his loan, while also prevent Carter from selling her controlling interest to anyone but him and warn that should Corgan succeed, that he will next try to obtain Carter’s 92.5% interest and get true control of the company well below the level he valued the company at, as well as the company’s true value and claimed that Corgan suffered no irreparable harm and that the situation was simply about a debt, nothing more and that the defendants are happy and ready to repay him. The filing also argues that the company is not insolvent and that there has been no Event of Default under the Pledge Agreement between Carter and Corgan and argued that while Corgan has suffered no real harm, Carter will suffer tremendous harm if the Court grants the injunction in Corgan’s favor and noted that the public interest weighs strongly in favor of denying Plaintiff’s request because his predatory conduct as a lender is improper and highly contrary to the public interest.

The report goes on to note that in explaining the course of events that led to Corgan investing in the company, Corgan came on board to work on the creative end and that in early 2016, the company identified a need for funding to address short-term cash flow challenges and Carter and that Carter anticipated the sale of TNA to a third-party strategic buyer and approached Corgan about a very short-term loan, to which Corgan told Carter that he was not interested in being a bank, but wanted to be an equity owner. Carter then told Corgan that she had not decided upon whether to sell yet, but that if she had, Corgan would receive a nice amount of interest for his loan and if she did not, he could convert the loan to equity and that the loan would satisfy the company’s cash needs through July 2016, according to the filing. Corgan agreed to loan the company a redacted amount of money, with the loan broken into two seperate advances and Corgan, according to TNA’s filing, stated that certain conditions to the second part of the advance had not been met and did not make the advance as originally envisioned. The filing noted that Carter, Corgan and Aroluxe discussed and negotiated as broad potential transaction that would see a group of investors brought in by Aroluxe invest in TNA with Corgan becoming a minority owner and that the three parties signed an agreement at that time, noting the discussions and intent for this to happen. TNA noted that Corgan did not advance them the second half of the original loan and they found themselves in a position where they still needed funding in July, due to the continuing cash flow challenges, but that around July 8th, 2016, Corgan loaned the company money for a second time, but with different terms and conditions originally outlined and agreed to in prior discussions and that Corgan insisted on a senior executive position and title in charge of the creative aspects of TNA and that Corgan and Carter agreed upon the Chief Creative Officer title.

The report states that the deal that was to be structured would feature Aroluxe’s consortium of investors as 52.5% owners, Carter as 27.5% owner, Corgan as 12.5% owner, Aroluxe as 5% owner and Anthem at 2.5% owner and that the transaction for this had not closed by August 11th, 2016 but remained under discussion, while IMPACT Ventures at the time, believed that Aroluxe would be providing temporary bridge funding until the deal closed and that all parties involved knew that the company was going to be needing funding for August and that the bridge loan from Aroluxe was needed, but did not happen, leading to Corgan lending IMPACT Ventures another round of money and that at this point, Corgan insisted to a series of very pro-Plaintiffs conditions that he is now using in his efforts to take control of the company and that at this point, Corgan’s three loans were rolled into a secured senior convertible promissory note and as condition of the third loan, Corgan insisted on taking the title of President from Carter and purporting to assume control over day-to-day business affairs and that it was noted that Carter put on a good face for the public in making the announcement, while as part of a revised deal, the new ownership structure, once Aroluxe’s investors put in their money and Corgan converted his debt into equity ownership of the company, the breakdown would then be Aroluxe’s consortum still as 52.5% owner, Corgan as 22.5% owner, Carter with 17.5% and Aroluxe and Anthem with 5% each, to which it was noted that Carter’s stake in the company was valued at more than twice what it was believed to be worth and that as part of the third loan, Corgan required that Carter sign a Pledge And Security Agreement drafted by Corgan’s attorney that was overwhelmingly favorable to Corgan and noted that Corgan knew that if Carter did not sign, then the company would face a difficult and immediate financial challenge and that the filing noted, nonetheless, IMPACT needed the short-term financing and Carter was comfortable that the Corgan loan could and would be repaid, even if the TNA transaction did not close and that to avoid a financial crisis, Carter reluctantly signed the Pledge Agreement and that the Pledge Agreement between Carter and Corgan granted Corgan a lien and first security interest in 100% of Carter’s interest in IMPACT, 92.5% of the company, to which TNA argue that the Agreement is intended to secure the obligations under the Corgan Note, but only the obligations of the Corgan Note.

The report states that it was noted in the Agreement that in the asbence of an Event of Default, Pleadgor [Corgan] shall be entitled to exercise all voting and/or consensual powers pertaining to the collateral [IMPACT] for all purposes not inconsistent with this Agreement and upon an Event of Default, Corgan shall be entitled to exercise all voting and/or consensual powers pertaining to the collateral for all purposes not inconsistent with this Agreement and that in the Pledge Agreement, the Event of Default was listed as either side breaching the agreement or if one of the sides became insolvent and that the agreement would terminate when all obligations under the Note have been fully paid. TNA’s filing noted that in the event the transaction involving the Aroluxe consortium did not close by September 27th, 2016, Corgan could, if he desired, convert his loan into a 36% interest in IMPACT and that the transaction did not happen by September 1st, to which TNA’s filing states that at Corgan’s request, Carter did not accept a request from Aroluxe or an extension on the exclusivity to close their deal to purchase the majority of the company and that on that same day, Corgan began his own negotiating to become the majority owner of the company. TNA claim that Corgan offered to convert his loan into an equity position and then pay off TNA’s debt to Aroluxe and that after doing so, he would then receive a 52.5% interest in the company, effectively replacing Dixie Carter as the majority owner and states that Carter spent the bulk of September trying to facilitate a modified deal between the parties to allow for this significant funding into the company and that it was noted that a company that Carter had prior discussions regarding a potential sale, re-approached Carter about buying the company’s assets and that it was noted that since Carter was unclear as to the degree of progress being made between Corgan and Aroluxe, she engaged in discussions with the company and that Carter also reached out to Aroluxe and Corgan to see if they were willing to issue an additional loan if they did not come to terms. TNA note that Carter began to have concerns about financing the TNA Bound For Glory pay-per-view and presumably the subsequent television tapings, but trusted Corgan’s representation that he would get a deal with Aroluxe to buy them out and take over as majority owner and noted that on September 27th, the company made a purchase offer at a price very similar to the one Corgan valued IMPACT at and that at that same day, after much effort and legal expense on Carter’s end to help Corgan negotiate his deal with Aroluxe, Corgan backed away from his offer to invest and stated that he would provide no additional funding and that it was noted that while Carter had her concerns, she had relied on Plaintiff to secure the funding for the Bound For Glory PPV and television tapings, because Corgan remained confident that he could get a deal done with Aroluxe.

The report further notes that it was noted that despite serving as President and knowing that funds were not available for production if he did not complete his deal, that Corgan made no effort to secure a backup source of funding for those tapings and that Plaintiff’s last-minute action in pulling out and his lack of effort to arrange any other alternative left Ms. Salinas [Dixie Carter] and IMPACT in an extremely difficult situation and that Carter immediately scrambled to find replacement funding and engaged in more serious talks with Anthem regarding a loan and that it was noted that near midnight, on the eve of the deadline to keep production on schedule, Anthem offered the financing, allowing the Bound For Glory pay-per-view and the subsequent television tapings that will carry the company through December to take place. TNA’s filing noted that by late September 2016, it had become apparent to Corgan that his plans to purchase the company were not going to succeed and that IMPACT now had access to other financing options and suitors, so he became more aggressive, stating that Carter was in default in a letter sent by his attorney and that it was noted that Carter denies those allegations, as well as the allegation that the company is insolvent.

The report goes on to note that on October 12th, Corgan issued a letter via his counsel purporting to exercise Carter’s voting rights in order to remove the entire IMPACT Ventures Board of Managers in order to appoint himself as the sole manager of the company and that TNA responded that his efforts to remove them are improper, without merit and are ineffective and that it was noted that in addition to being factually unsubstantiated and wrongful as a lender, Plaintiff did not secure the consent of Anthem before purporting to exercise Carter’s right and noted that the next day, Corgan filed his lawsuit against them and the temporary restraining order has, as Corgan no doubt hoped, delayed IMPACT and Carter from repaying his loan and claimed that Corgan’s lack of involvement in management has been his own choice and that it was noted that since taking on the position, he has only made 2 trips to the company’s headquarters in Nashville on August 29th/30th and September 26th/27th and noted that during the trips, Corgan spent the overwhelming majority of the time with the company’s creative team at the production studios that are located in a different location from the company HQ and/or attempted to negotiate a purchase of the company and that during those visits, he only visited the company’s primary business office once and only for a brief amount of time, doing so during a time period that no one from TNA senior management was aware that he was coming or had they asked to meet with him and noted that their Board of Managers has been and remains willing to meet with Corgan, however he has made little or no attempt to meet with the board to discuss strategy, the company’s future or otherwise and that it was noted that Corgan was invited to take part in an in-person executive meeting for the company, but only offered to make himself available via telephone and that it was noted that he was invited, but declined to attend a locker room talent meeting on October 3rd. TNA’s filing stated that Corgan has instead conducted business on his own and when asked by Carter why he was not involving others in planning or meetings responded stating you are damaged goods, I don’t intend to involve you. TNA’s side also denied that Corgan has been withheld from accessing the company books, records, etc. and that he had been given access to a digital data room containing that information and noted that its note to Corgan is unclear as to whether it can be paid back prior to the November 1st, 2016 date and that it was noted that Anthem has proposed loaning IMPACT the money it needs to pay Corgan off and when IMPACT contacted Corgan’s attorney to request a payoff amount and communicate an offer to pay all principal and interest due, they were told the following by Corgan’s counsel, “The former Managers no longer have the authority to conduct those [i.e. borrowing] discussions on behalf of TNA, and are enjoined from doing so without our client’s consent”, meaning that according to TNA’s side, Corgan will not respond to requests to get a total amount TNA has to pay him, because according to Corgan, they are no longer in an official position to have that communication, to accept the money from Anthem or to pay Corgan off and that TNA’s side state that Corgan’s conduct in attempting to block the effort to repay his loan demonstrates that his true intent is to usurp Dixie Carter’s ownership and control of IMPACT.

The report further states that it was also noted that Carter e-mailed Corgan on October 17th, 2016 requesting that he consent to Anthem providing the loan and paying him back and that the next day, Corgan’s counsel contacted IMPACT’s counsel providing a payoff amount and expressed a willingness to consent to the new loan and to accept repayment on November 1st, subject to certain easily satisfied conditions and that one of those conditions was that the defendants all certify that there was no agreement that, if consummated, would constitute a corporate transaction, because Corgan claims he would be owed a bonus if that happens and that TNA’s attorneys provided the certification requested and asked Corgan’s attorneys to confirm that everything would be stamped, cancelled and returned, once he was in receipt of payment of his principal and interest from the loan and that the hope was that Plaintiff had seen the light and would act reasonably was short-lived, as on October 20th, TNA was contacted by Corgan’s attorney and informed of an additional amount of money that they were now required to pay and that his note would be deemed paid only on receipt of that amount. TNA’s side noted that Corgan’s game is obvious and that he plans to constantly move the goal line in an effort to prevent TNA from repaying his loan, so that he can continue his efforts to take over the company, all the while trying to limit Dixie Carter’s ability to sell the company or secure additional financing and investments from others and that Corgan is doing this, in the hopes that short-term cash flow challenges will strangle the company and make it vulnerable to takeover and stated that there is no agreement to sell IMPACT or its assets, there has been no corporate transaction since August 11th, 2016 and that there will be none prior to November 1st and note, “if Plaintiff will stop interfering, IMPACT can obtain further financing/investment to address its cash-flow cycle and operational needs” and stated that Corgan’s refusal to accept payment on his loan is the primary impediment to IMPACT obtaining additional funds and continuing its operations and that in defending that the company was not insolvent, the company showcased contracted revenues for International Revenue and listed projected advertising sales and sponsorship revenue for 2017 from IMPACT airing on POP, as well as PPV broadcasts and noted that the cash-flow issues came from IMPACT leaving Destination America and going to POP TV and that the cash issues were expected and required to transition the brand from a license model to a barter sales contract tied to advertising sales, meaning that Destination America paid TNA for the content, while POP TV is paying TNA based on a piece of the advertising sales derived from TNA commercial time. TNA’s side explained that the change was necessary in order to secure the company’s valuable digital rights, full sponsorship/advertising rights and non-exclusivity rights, all of which are critical to the long-term growth of the brand and noted that when making the transition, it is typical for advertising sales to take time to increase to a level at which the barter sales contract generates revenue similar to a license structure and that it was stated that the company also expects additional short-term funds, including a payment from an international licensee the week of October 24th, 2016, while it was also noted that IMPACT has successfully borrowed money in the past as needed to fund operations and can continue to do so and asked that the Court deny Corgan’s claims and deny his request for a temporary injunction.