Major Update – Billy Corgan’s Lawsuit Against TNA Wrestling

All right, folks…here we go. Billy Corgan’s forty-one page lawsuit against TNA, Impact Ventures, Dixie Carter-Salinas, Dean Broadhead and Serg Salinas has been released in a redacted format and it reveals a lot of background on the company as well as why Corgan is suing, what he wants from the company and more. The financial figures in the lawsuit are redacted.

In the lawsuit, Corgan essentially lays out his history with TNA and says that he entered into an agreement in September to save the company from foreclosure from Aroluxe Media, the company’s production company. Aroluxe Media was covering the costs of TNA’s TV tapings from January through the middle of the year, with TNA paying the company back in installments. If Dixie Carter failed to make their monthly payments, she could lose control of TNA.

According to the lawsuit, Corgan got involved in June when TNA needed money in order to pay Aroluxe so that they could do TV tapings over Slammiversary weekend. In addition to the monthly payment, Aroluxe was requiring additional payment due to TNA’s “defaulting on multiple payments” at that point. He again invested money into the company in July to prevent Aroluxe from foreclosing on the company, and then again in August.

The August investment was different though, as Aroluxe’s contract with TNA had expired which allowed Aroluxe to foreclose at any point. Corgan claims that because of this, he entered into an “amended and restated loan agreement” with both Carter and Aroluxe which gave him a “second priority secured convertible priority note” that replaced the original note about how much he was owed. This agreement was the one that saw Corgan named President of TNA, while Carter was moved to Chairman and Chief Strategy Officer of Impact Ventures.

As security for the loan, Carter agreed to a “100% equity pledge agreement” with Corgan which means that if the company defaulted, Corgan would gain all “voting or consensual powers” pertaining to TNA — in other words, if Carter defaulted on the loan, Corgan would gain complete control of Impact Ventures, TNA’s parent company. If the agreement had not been reached, the lawsuit states, Aroluxe would have foreclosed on the company.

Corgan says he wanted to be President so he could oversee the company’s daily operations and improve its financial condition. Carter also signed paperwork appointing Corgan as the “attorney-de-facto” of TNA if an “Event of Default” occurs under the terms of the agreement. A default in that case is the insolvency of TNA and/or Dixie Carter herself.

The lawsuit states that Impact Ventures is insolvent and that “its liabilities exceed the values of its assets, and that Impact Ventures is unable to pay its debts as they come do in the ordinary course of business.” The suit includes several statements from Impact Ventures that Corgan says show a “cumulative cash flow [the amount is redacted] for the period from September to December 2016, followed by the period of September 2016 through June 2017.” It’s worth noting here that Serg Salinas (Dixie’s husband) and Broadhead are listed as defendants because they are the Managers of Impact Ventures. The suit also lists Carter as the “sole member of the company” with Aroluxe Media and Anthem Media (Fight Network’s parent company) listed as “significant creditors in the company.” It is believed Aroluxe owns 5% and Anthem owns 2.5%, while Dixie owns 92.5%.

Corgan alleges that he has made numerous requests for updated balance sheets but the company has not given him any past June 30th. He further argues that the sheets he does have are in a negative balance when you compare debts to assets and that financials have gotten worse since the last balance sheets he has. Corgan says that due to this TNA is insolvent and that he should be awarded Dixie Carter’s share in the company.

Corgan also mentions WWE and says that both Carter and Broadhead have denied to him the legitimacy of reports that TNA has been in talks with WWE about selling their video library, but that “Mr. Salinas” acknowledged those talks to the talent on the day of Bound For Glory. He argues that the tape library is the company’s biggest asset and that being lied to about discussions with WWE despite the fact that he’s President and a creditor to TNA breaches the agreement he signed with Carter and Aroluxe, which entitles him to a full review of TNA’s “Officers, counsel, books, records; the full ability to investigate the company’s titles to property and to the condition and nature of its assets, business and liabilities” and the ability to review TNA’s business plan with “key officers.” He also says he was not informed of the company’s discussions with Anthem Media that led to the recent loan until after the transaction was done.

The lawsuit adds, “This recent conduct is consistent with the way Mrs. Salinas [Carter] and the other members have dealt with the Plaintiff since the inception of his involvement with Impact Ventures. They have failed to keep Plaintiff apprised of matters of great significance to the company; they have routinely misled plaintiff as to the company’s finances, operations and future prospects; they have failed to provide the plaintiff with information necessary to discharge his duties as President to manage the day-to-day operations of the business; and they have regularly interfered with, subverted or ignored plaintiff’s authority to manage affairs in the company.” According to Corgan, this results in an additional default in his agreement with Carter.

Corgan says that Carter was informed of a default event on September 29th, the day before Anthem (through MMC Acquisitions) financed Bound For Glory and the TV tapings that followed. He has received no response to that default, nor his notification to Carter on October 12th that he was exercising his right to take over her stock and put his own managers in charge of Impact Ventures.

Corgan adds, “The company is continuing to flounder and has been taken to the brink of financial collapse under Ms. Salinas and the other managers. The company’s secured creditors, including Aroluxe and Anthem, can foreclose at any time.” He is asking the court to declare him entitled to Carter’s 92.5% ownership in the company along with her voting rights and his agreed-to ability to replace the current managers. He also wants damages for breach of contract and an an injunction preventing any making business decisions that could further harm Corgan and TNA, not to mention keeping them from selling the company or its assets until the suit is resolved.

TNA filed a response to the lawsuit yesterday, but that remains sealed. The next hearing is tomorrow at 2 PM ET and will be regarding Corgan’s request for a temporary injunction.

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