According to PWInsider, the Chancery Court of Nashville has denied Billy Corgan’s request for a temporary injunction against Dixie Carter, Dixie’s husband Serg Salinas, Dean Broadhead, and Impact Ventures. In addition to denying his request, the court dissolved Corgan’s temporary restraining order against the company and certain individuals therein.
This means that TNA can move forward as planned, without needing to get Corgan’s approval before making large-scale business decisions. It should be noted that this will not put an end to Corgan’s lawsuit against the company, and in addition, Dixie Carter still owes the Smashing Pumpkin front man $1.8M. As previously reported, Corgan can opt to convert the debt he’s owed into equity in the promotion, which would yield 36% ownership of the company.
Chancellor Ellen Hobbs Lyle, who presided over the proceedings, noted that she denied Billy Corgan’s request for a number of reasons. The court agreed with TNA’s argument that the agreement between Corgan and Carter was “not implemented in accordance with Tennessee Law,” therefore it was “unenforceable,” meaning Corgan couldn’t remove Carter nor any other members of the management team.
In terms of the promotion being insolvent, the Chancellor noted that the court “rules on hard facts and hard facts alone.” The original agreement between parties didn’t define “insolvent” by any specific terms. Therefore the court cannot rule on whether the company has truly become insolvent. Furthermore, the Chancellor claimed it was hard to say the promotion was insolvent since Corgan’s agreement with Carter was based solely on saving a company on the brink of bankruptcy. The court noted that TNA was “already in financial trouble and distress when Corgan stepped in.” In addition, TNA CFO Dean Broadhead stated on the record that without Corgan’s assistance, “all would have been lost.”
Chancellor Ellen Hobbs Lyle stated: “Thus, the context of facts of the LLC’s financial distress at the time the insolvency default provision of the Pledge Agreement was entered into by the parties in August 2016 creates an ambiguity about the meaning of the text of the provision that a default occurs under the Pledge Agreement ‘if’ the LLC ‘becomes insolvent.'” This basically means Corgan can’t claim the company is insolvent, since it was in such terrible shape when he came aboard earlier this year.
In regards to Dixie Carter making deals and business arrangements behind Corgan’s back, the court noted that Corgan has a version of the facts, whereas TNA has another, and at this juncture it’s impossible to tell whose version is the most accurate. The Chancellor noted that Corgan could win at trial, should he present the proper evidence, but at this point, he doesn’t have enough to make a solid case.
As mentioned, Corgan is free to proceed with his lawsuit against the company, and Carter is still obligated to pay him the $1.8M he’s owed, which is due on 11/1. That’s tomorrow, which means Corgan has until the end of today to convert his debt into the aforementioned 36% equity stake, though that’s unlikely to happen at this point. The Fight Network parent company, Anthem Media, which owns a minority stake in the company, is more than willing to pay Corgan the money he’s owed.
It’ll be very interesting to see how things shake out over the next few weeks. Once the Billy Corgan situation is settled, it’s believed that Anthem Media will replace Dixie Carter as majority share owner, with Aroluxe’s Jason Brown serving as CEO. From there, Carter would stay on as minority owner with just 5%, and could continue onward as an on-air personality.
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