In a further update on the lawsuit filed by TNA Wrestling President Billy Corgan against TNA Entertainment LLC, IMPACT Ventures LLC, TNA Wrestling Chairman Dixie Carter, her husband Serg Salinas and TNA Wrestling’s Chief Financial Officer Dean Broadhead, a report from PWInsider.com notes that a number of new documents were filed prior to the scheduled hearing before the Chancery Court in Nashville, Tennessee.
The report notes that in a redacted memorandum filed with the Nashville Chancery Court to explain why he requires a restraining order against the defendants in his lawsuit against TNA, Billy Corgan laid out his argument for why the company is insolvent and notes that currently, IMPACT Ventures’ balance sheet shows the company’s debts are close to ten times the company’s assets and states that the company falls under the definition of insolvent for the state of Tennessee, which describes the term as similar to the definition of the term in the Uniform Commercial Code and the Bankruptcy Act, which states that insolvent means having generally ceased to pay debts in the ordinary course of business other than as a result of a bonafide dispute, being unable to pay debts as they become due or being insolvent within the meaning of federal bankruptcy law. Corgan’s push for the restraining order also noted that, according to Rule 65 of Tennessee Rules of Civil Procedure, the court is authorized to issue temporary restraining orders without notice to the adverse party if specific facts in an affidavit or a verified complaint clearly show that immediate and irreparable injury, loss or damage will result to the applicant before the adverse party can be heard in opposition and argues that since this is a private issue between Corgan and the defendants, it is possible that left unchecked, they will cause Corgan immediate and irreparable harm.
The report states that also filed was a redcated declaration from Corgan laying out why he invested in TNA and accusing the defendants of hiding how bad the company’s debts were in order to get the investment from Corgan and that in describing his initial loan on June 10th, 2016, Corgan notes that he was given a senior secured promissory note and was not aware that Aroluxe and Anthem Media Sports and Entertainment had already been granted seniority regarding the debt that they were owed, meaning in layman’s terms, Corgan invested under the belief that he would be the first in line to be repaid, only to learn that he was actually third in line and alleges that he was told by Dixie Carter and TNA’s Chief Financial Officer Dean Broadhead that TNA had a debt of a certain amount and was never told the company actually had debts of a redacted amount and is alleging that he was misled about the amount of money the company actually owed before he made his first investment and alleges that he was never informed of the actual debt when he made his second investment in July and only learned of the actual level of debt in September 2016 when he was provided with a company balance sheet dated June 30th, 2016 by Dean Broadhead. Corgan stated that he learned what the actual debt of the company was in the course of this litigation through the documents that IMPACT Ventures produced and that Corgan did not know that IMPACT Ventures’ debts were that high and would never have agreed to invest additional capital in IMPACT Ventures had he known that the company’s debts were so high. Corgan also stated that he was misled into making his third and final loan to the company back in August, based on repeated representation by Dixie Carter that acquisition negotiations were underway with third parties and that an acquisition of the company was imminent, including a proposed investment from Aroluxe.
The report further notes that Corgan alleged in his declaration that the company has prevented him from doing his duties as President, learned that the company has failed to pay its taxes based on an article in the Tennessean newspaper and that a lien has been filed against the company, that a number of lawsuits had been filed against the company by Audience of One Productions, American Express and BankDirect Capital Finance LLC and revealed that TNA planned to film television in Orlando from November 1st through November 3rd at Universal Studios, but that the decision was made on October 25th to postpone those tapings due to a lack of funds. Corgan also alleges that IMPACT Ventures also continue to not pay its talent and that the defendants are blaming him and the temporary restraining order in this case for the lack of payment. The declaration included a certification sent to his attorney by TNA’s counsel on October 30th, including a term sheet that would have required Corgan to give the company a full release of all claims against them by Corgan to which Corgan wrote, “I will not agree to provide Impact Ventures with a ‘full release’ as a condition to the repayment of my loan proceeds. I am not required under any of the loan documents to provide such a release in return for full payment. I also believe that I have claims against Impact Ventures and the other defendants that are separate and apart from the claims that I have currently asserted herien, and I am not willing to waive or release those claims”.
Corgan also stated that he was never provided with a proposed draft of an employee agreement in connection to his role as President of the company and that he has also not been provided with access to the information he would require under the Second Amended Corgan Loan Agreement that would allow him to make an informed decision as to whether to convert his loan into an equity position in the company, meaning that Corgan’s loan was similar to what a bank would do when it loans money to a film production and the collateral if they are not repaid, meaning Corgan is saying that he can convert to ownership but can’t make that decision without information the company will not give him and states that he understands that Jason Brown of Aroluxe has undertaken the duties of managing the day-to-day operations of TNA, while Corgan has been excluded from those duties despite his title and his signed agreement and stated that he is under the understanding that Brown has been planning events for 2017 and negotiating contracts with talents.