In case you somehow hadn’t heard, Billy Corgan, prospective savior of TNA, is now suing the company over accusations that they are trying to screw him out of an agreement that would have given him near-total control over the company if they failed to pay back several loans he gave to the struggling wrestling organization. On Wednesday evening, Corgan and TNA were in court in Tennessee for an official hearing. Compiled from a series of Tweets by Tennessee reporter Nate Rau, here is a brief summary of the arguments from both sides.
Scott Sims, attorney for Billy Corgan
– Corgan saved the company on 3 occasions. But TNA didn’t hold up its end of bargain. Sims says Corgan and Carter entered pledge agreement that included insolvency cause. Sims said TNA misled BC about company debts. He says Corgan was named pres but excluded from mgmt decisions. Sims says proving the pledge is crucial part of lawsuit. The second question is if TNA really is insolvent. Sims says there is no doubt about that.
– On three occasions, Corgan provided money to ensure TNA could continue to operate, at which point Corgan and Dixie Carter entered an agreement that would allow Corgan control of the company if it ever became insolvent again. Instead, TNA lied to Corgan about the company’s debts, and he was excluded from management decisions despite being named President.
– When he loaned TNA money and made the agreement, Corgan was not made aware of the company’s true financial situation.
– TNA is not paying any talent, which they blame on Corgan’s lawsuit, but Sims stated it is because they do not have the money to do so, regardless of any lawsuits.
– TNA has 52% more liabilities than they did in June, when Corgan last provided them with money. They have failed to produce a schedule of liabilities, and are hiding their true debts.
– WWE did make an offer to buy the tape library, which has now been significantly lowered, and includes a non-compete clause for both Carter and Corgan that would not allow them to start a new wrestling promotion for at least a year. The offer is also lower than the amount of TNA’s known liabilities, and Dixie Carter allegedly told WWE that she won’t sell to them as long as Corgan is still around.
– Dixie Carter has made an offer to allow Corgan to buy her stake in the company in the past.
Travis Parham, attorney for Dixie Carter and TNA
– Corgan’s lawsuit has hurt TNA’s financial standing and ability to find investors
– The current ownership situation is that Carter owns 92.5 %, Aroluxe owns 5%, and Anthem Media owns 2%. Anthem has offered to pay off Corgan’s loan to TNA and install Aroluxe’s Jason Brown as CEO.
– Allegedly, Corgan would only loan money in exchange for the potential for it to become a stake in the company. After the third loan, he insisted on a pledge agreement that would give him controlling interest in the company if TNA defaulted. Parham said the deal is consistent with predatory lending, and repeated that TNA (through Anthem) was willing to pay off Corgan’s loan, but not give him a stake in the company.
– Corgan offered to buy TNA when his loan agreement expired, which would have given him 52% of the company. Corgan had refused to let TNA refinance his loan and pay him back, because he wants this opportunity to own Dixie Carter’s entire stake in the company. Corgan’s lawsuit is the result of a failed attempt to purchase the company, and is the only reason why the company is in financial distress at the moment.
– Apparently the contract between Corgan and Carter is illegal under Tennessee law, which means even if TNA is insolvent (which they claim it is not), Carter still can’t transfer her stake to Corgan.
A ruling on this lawsuit is expected to be made on Monday.