As has been previously reported here and in other outlets, there was a hearing in Nashville, TN Wednesday for the lawsuit filed by Billy Corgan against Impact Ventures LLC, Dixie Carter, and TNA Wrestling Management. Corgan did not personally appear but was represented by his attorney, Scott Sims, while Dixie Carter did appear with the company’s attorney, Travis Parham.
Nate Rau, a reporter for The Tennessean newspaper, was live in the courtroom and tweeted out a lot of notes regarding this story. I will highlight some of the information obtained through those tweets here, but I strongly encourage you to check out his Twitter feed for a whole lot more information than I will be recapping.
The hearing adjourned with Chancellor Ellen Hobbs Lyle stating that she will make her ruling on the suit on Monday, October 31.
Here are some chosen highlights of the hearing:
- Attorney Sims (representing Corgan) argued that Corgan and Dixie Carter had entered into a contractual agreement that included an insolvency clause. Sims also claimed that TNA had misled Corgan on exactly how much debt the company had, and failed to include him in management level decisions though he was named President.
- Sims made a number of statements regarding TNA’s financial situation. He argued the company being insolvent, saying that TNA fails the balance sheet test and the cash flow test. He also argued that talent is not being paid, and the company has 52 percent more liabilities now than they did in June. They have not attempted to assign values to assets such as the video library, and they have not produced a schedule of liabilities either. Sims implied that because the schedule of liabilities was not produced, TNA may be hiding something.
- Sims did bring up negotiations with WWE, saying there was an offer made by WWE in some form but has been lowered since those talks started, and the offer is still significantly lower than the estimate of debt owed by TNA.
- Impact Ventures attorney Travis Parham broke down the ownership stake of the company, saying Dixie Carter owns 92.5 percent, Aroluxe owns five percent, and Anthem Sports and Entertainment owns two percent. Prior to Parham speaking, Sims did reference the press release from Anthem, who volunteered to pay Corgan’s loans back. A lawyer from Anthem affirmed this statement, saying they would pay those loans back less any transaction premiums.
- Parham did confirm the three loans Corgan made to the company, and said they could be transferred to equity. Parham argued that the loans were made so that Corgan could benefit himself, and that Corgan has resisted or rejected efforts to be paid back. He also criticized the rate of return on the loans, saying they would make a loan shark blush at a 200 percent rate of return.
- Parham denied that financial information was hidden from Corgan. He accused Corgan’s tactics of being the reason TNA defaulted on its own loan. He also insisted that Corgan “has not suffered irreparable harm” and asked that injunctive relief be used sparingly.
- Parham also argued that the contract between Corgan and Carter is not legal under Tennessee law and does not have to be upheld.
Bill Says: As noted, there is a LOT more in Nate Rau’s Twitter feed to check out beyond these highlights, so I strongly encourage you to visit that for more information. In the end, I think there are two big things to look for here. The first is how Chancellor Hobbs-Lyle defines “insolvent” and applies it to this particular case. We’ve documented the amount of suits facing TNA from various creditors previously. The other is whether or not Parham is successful in arguing that the contract between Dixie Carter and Billy Corgan is indeed not legal in Tennessee or not. I think these are the biggest key factors as to where things go from here.
We’ll keep up on the story, including the ruling by the Chancellor on Monday, October 31.