On Friday, Nashville Chancery Court Chancellor Ellen Hobbes Lyle officially unsealed some documents that were filed in Billy Corgan’s suit against TNA Impact Wrestling and the parent company, Impact Ventures LLC. The initial complaint and temporary restraining order memorandum remain under seal, but will be re-filed publicly on October 26. You can see the available public documents at this link and at this link.
As of this time, there still is a hearing scheduled for October 26 regarding the documents. At that hearing, it will be determined if Billy Corgan will gain an injunction to replace his temporary restraining order. The current order says that the company cannot take any action without Corgan’s consent. This includes signing contracts, selling assets like the tape library, the company itself, or other physical assets, and the like.
At the core of Corgan’s complaint is that TNA/Impact Ventures LLC is insolvent and he should be able to take over the voting rights of Dixie Carter, and be able to replace management team members. He and the company entered into an “equity pledge agreement,” and that days before the Bound for Glory pay per view he put the company on notice that he was exercising his rights under the agreement due to “multiple events of default under the equity pledge agreement.”
TNA has denied their insolvent state, saying that under Tennessee state law an entity “is insolvent only if the sum of the debtor’s debts is greater than all of the debtors’ assets, at a fair valuation.” The company believes that their assets are of greater value than the debt they owe. They have also denied that there have been the events of default that Corgan claims. It’s worth noting that TNA did object to a request for documents showing the company not being able to pay their debts in full, claiming that “such documents are not maintained in a manner that would enable Impact Ventures to readily obtain such information.”
As we’ve previously pointed out, TNA is very deeply in debt to a number of entities and that is a matter of public record. Some reports are putting that debt at around $4 million total. The company’s most valuable asset, the video library, is worth $1 million based on what WWE would be willing to pay for other such libraries.
Bill Says: It looks like, by reading these documents, that Corgan is trying to grab control of TNA and at the same time prevent Dixie Carter from selling. We noted the other day that Anthem Sports and Entertainment has stepped up to say they would repay Corgan for the money he had invested into TNA, so it seems like Anthem may have an interest in buying the company. But they can’t make a move while things are tied up in court also.
One would have to think that for in order for Corgan to drop the suit and/or walk away from the company, he would have to be repaid all that he has invested plus his mounting legal costs, if not more. And that doesn’t guarantee that Corgan would walk, because he may believe that he has a strong enough case to see this the whole way through.
Dixie may be a bit disillusioned in the value of the organization, as the the mounting claims of debt against the company continue to rise. Anthem is rumored to have a share in the tape library, so perhaps they’re convincing her that the value is more than the norm.
As always, much more to follow as the hearings take place this coming week.