TNA Turmoil Continues
By: Larry Causion Jr. CausionCreations.com
Posted: Wednesday, November 2, 2016
Credit: Wrestling Observer
Posted: Wednesday, November 2, 2016
Credit: Wrestling Observer
The drama that has unfolded over the last month regarding TNA's future continued in a Nashville, TN, courtroom Monday as Billy Corgan's request for control over the troubled wrestling company was rejected.
In her ruling, Chancellor Ellen Hobbs Lyle said that the temporary injunction Corgan was seeking didn't meet the burden of proof required to attain it. He is due to be paid back on several loans he had made the company that included the option to take over Carter's voting rights if TNA became insolvent. That was the basis of Corgan's case due to the amount of money TNA owes in contrast to the amount of revenue the company has.
Two weeks ago, one story after another broke regarding TNA, including multiple lawsuits and a tax lien from the state of Tennessee based on non-payment of bills. Billy Corgan, who had just been named President, filed a lawsuit on 10/13 against Impact Ventures, TNA Entertainment, Dixie Carter Salinas (her married name) and TNA’s CFO Dean Broadhead. The contents were kept sealed pending a hearing on 10/26 where he hoped to get an injunction against TNA. The details of the lawsuit were thought to be devastating for the company.
In her ruling, Chancellor Ellen Hobbs Lyle said that the temporary injunction Corgan was seeking didn't meet the burden of proof required to attain it. He is due to be paid back on several loans he had made the company that included the option to take over Carter's voting rights if TNA became insolvent. That was the basis of Corgan's case due to the amount of money TNA owes in contrast to the amount of revenue the company has.
Two weeks ago, one story after another broke regarding TNA, including multiple lawsuits and a tax lien from the state of Tennessee based on non-payment of bills. Billy Corgan, who had just been named President, filed a lawsuit on 10/13 against Impact Ventures, TNA Entertainment, Dixie Carter Salinas (her married name) and TNA’s CFO Dean Broadhead. The contents were kept sealed pending a hearing on 10/26 where he hoped to get an injunction against TNA. The details of the lawsuit were thought to be devastating for the company.
Corgan had believed he was going to buy control of the company, and had financed the prior two sets of television tapings in exchange for points in the company. That fell through, leaving him furious. Much of what is in the suit is confidential, but sources have noted that while TNA said Corgan was in control of the last set of tapings, he actually was not, nor was he running the company as TNA said he was, and he wasn’t happy about that. Sources also say that Corgan was greatly misled about the company’s financial situation, and that creative decisions he made for the last set of tapings were not implemented.
On 9/30, just before the most recent set of tapings, MCC Acquisitions Corporation lent TNA money. The address of the company is the same Toronto address of Anthem Sports and Entertainment, which TNA also owed money to, which is the parent company of The Fight Network. It also came out that the company owed $3.4 million to Anthem Entertainment and Aroluxe Media ($2.3 million to Aroluxe and $1.1 million to Fight Network).
The Fight Network money was enough to pay for production and expenses of this set of tapings. Whether it was enough to continue running a company where virtually no money is coming in was a different question.
The Fight Network money was enough to pay for production and expenses of this set of tapings. Whether it was enough to continue running a company where virtually no money is coming in was a different question.
The money, apparently from The Fight Network, was enough to pay for production and expenses of this set of tapings. Whether it was enough to continue running a company where virtually no money is coming in was a different question. The next question was the talent. Those who were under guaranteed contracts were due checks on 10/15 and 10/30. We don’t know if some people got paid on time, as TNA often picks and chooses based on need at the moment on where they spend whatever money they have, but we are aware of talent that didn’t get paid, and they were told that they would be paid at the beginning of next week. It’s sounds like the Fight Network funding will allow them to be paid.
The state of Tennessee filed a lien against TNA Entertainment LLC on 9/8, for back taxes, although the amount is not known. On 9/27, Audience of One Productions, LLC filed a lawsuit in U.S. District Court for the Eastern District of Virginia in Richmond, VA, against Impact Ventures. According to the suit, on October 23, 2015, Audience of One sent TNA an invoice for $288,930.04 for the production work done up to that point in time. On November 9, 2015, Broadhead e-mailed Audience of One to tell them that TNA was working furiously on closing a new TV deal that would put the company in more than 80 million homes. He asked them to hang in there with us and they would come out of this in a much better position. Audience f One sent them a bill again on November 17, 2015, this time for $293,263.99, including 1.5 percent late payment interest.
The state of Tennessee filed a lien against TNA Entertainment LLC on 9/8, for back taxes, although the amount is not known. On 9/27, Audience of One Productions, LLC filed a lawsuit in U.S. District Court for the Eastern District of Virginia in Richmond, VA, against Impact Ventures. According to the suit, on October 23, 2015, Audience of One sent TNA an invoice for $288,930.04 for the production work done up to that point in time. On November 9, 2015, Broadhead e-mailed Audience of One to tell them that TNA was working furiously on closing a new TV deal that would put the company in more than 80 million homes. He asked them to hang in there with us and they would come out of this in a much better position. Audience f One sent them a bill again on November 17, 2015, this time for $293,263.99, including 1.5 percent late payment interest.
The questions regarding the funding and why Anthem was loaning TNA money instead of buying into the company, as they did with earlier funding, was because another partial owner, Billy Corgan, had gotten a temporary restraining order, which banned TNA from selling any stock in the company or selling any company assets, the key being both stock and the tape library.
The key in documentation is that the loan from Anthem was slated to be turned into a controlling investment in the company, which is why Corgan filed for his restraining order and attempt at an injunction.
A hearing was held on 10/26 at Nashville Chancery Court under Judge Chancellor Ellen Hobbs Lyle. After both sides pleaded their case, Hobbs Lyle said she would make a ruling on 10/31.
The key in documentation is that the loan from Anthem was slated to be turned into a controlling investment in the company, which is why Corgan filed for his restraining order and attempt at an injunction.
A hearing was held on 10/26 at Nashville Chancery Court under Judge Chancellor Ellen Hobbs Lyle. After both sides pleaded their case, Hobbs Lyle said she would make a ruling on 10/31.
Corgan’s legal team stated that the agreement in the latest “loan” from Anthem, believed to be for $1.8 million, is that Anthem would end up with 85 percent of the company, Aroluxe would become 10 percent owners, and that Jason Brown of Aroluxe would take over as CEO and run the day-to-day operations and receive a three-year contract. It was not clear who would own the other five percent of the company, but Carter would make the most sense, and that they entered into an agreement without his knowledge even though his loan allowed him to get a 38 percent ownership in the company should he request it.
In documentation, it has become clear that even though TNA outright told Corgan they were not selling to WWE, and Carter told the wrestlers that they were not selling either the company or tape library to WWE, that they were in the middle of negotiations to sell the company to WWE at the time.
Corgan said that nobody in Impact Venture informed him with any information regarding the talks with WWE, or any information regarding the deals with Anthem until after the Anthem deal was closed.
He also claimed that on 9/26, he was told that the reports that TNA was in talks with WWE were “absolutely not true,” but since found out that on 9/25, the day before, that Broadhead had sent a WWE representative certain due diligence material that the company had requested. Material also showed that WWE questioned Carter about Corgan’s loan to the company. Carter responded in writing to them, saying that , “I intend to pay the loan back in full, plus interest, prior to selling the company.”
Corgan said that nobody in Impact Venture informed him with any information regarding the talks with WWE, or any information regarding the deals with Anthem until after the Anthem deal was closed.
He also claimed that on 9/26, he was told that the reports that TNA was in talks with WWE were “absolutely not true,” but since found out that on 9/25, the day before, that Broadhead had sent a WWE representative certain due diligence material that the company had requested. Material also showed that WWE questioned Carter about Corgan’s loan to the company. Carter responded in writing to them, saying that , “I intend to pay the loan back in full, plus interest, prior to selling the company.”
Another key is that to get the temporary restraining order, which he was attempting to turn into an injunction, Hobbs Lyle had to believe and rule that there was a strong likelihood that Corgan would eventually prevail in his lawsuit against TNA. While the suit can be long and expensive, one judge’s opinion already is that most likely Corgan would win in the end.
Anthem was not only willing to fund the company for now, in the context of a loan as opposed to a buy in, but was also willing, according to their press release, to front the money that would repay Corgan for all the money he spent funding the company for two sets of tapings this year. Clearly, Dixie Carter wanted the lawsuit by Corgan to go away, since the judge already indicated there’s a strong likelihood of her losing, plus wanted to keep the content of the suit quiet.
Anthem was not only willing to fund the company for now, in the context of a loan as opposed to a buy in, but was also willing, according to their press release, to front the money that would repay Corgan for all the money he spent funding the company for two sets of tapings this year. Clearly, Dixie Carter wanted the lawsuit by Corgan to go away, since the judge already indicated there’s a strong likelihood of her losing, plus wanted to keep the content of the suit quiet.
In recent weeks, all of the various people, Carter, Corgan, Aroluxe and Anthem have been in talks and negotiations in attempts to take over the company or retain power. Corgan claimed Carter at one point asked him to completely buy her out. Carter also sent an e-mail to WWE saying that she won’t (or perhaps can’t) sell until Corgan is out.
Impact Ventures response to the Corgan lawsuit was sealed, but based on Corgan’s side response, which wasn’t sealed, that Impact and Carter claimed Corgan’s attempt to get an injunction was “nothing more than a back-handed grab for power.”
The Impact Ventures response also categorized Corgan as a “predatory lender” with “strong-arm loans.”
Impact Ventures response to the Corgan lawsuit was sealed, but based on Corgan’s side response, which wasn’t sealed, that Impact and Carter claimed Corgan’s attempt to get an injunction was “nothing more than a back-handed grab for power.”
The Impact Ventures response also categorized Corgan as a “predatory lender” with “strong-arm loans.”
They also stated that their agreement with Corgan was that they would repay the loans to him by 11/1, and thus, since that date hadn’t come, he shouldn’t be able to use the fact they haven’t paid him as anything legally in regard to the case. They claimed the lawsuit was filed was because Corgan only had 20 days left before being paid back, and at that point the company would move on without him with Anthem Sports and Entertainment as the majority owner and Jason Brown of Aroluxe in charge.
It should be noted that Corgan never claimed he had to be repaid, just that he was misled when investing and that in exchange for investing later, was given the title of President and told he was in charge, while the company very clearly wasn’t allowing him to be in charge. They claimed he’s trying to use this injunction as a way to force Carter to sell the company to him, because if he gets the injunction, she couldn’t sell to anyone else.
They said Corgan hasn’t been harmed, he just lent money and they are about to pay him back. They claimed that Corgan was given the Chief Creative Officer title because he insisted on it when he put money in the first time. Later, when he put money in again, he insisted on being President of the company.
Corgan’s claim was that he had great passion for TNA wrestling and its fans and filing suit was the last thing he wanted to do, but he exhausted every channel to avoid litigation and was forced to sue because of the defendants “repeated willful disregard of their contractual obligations to him.”
They said Corgan hasn’t been harmed, he just lent money and they are about to pay him back. They claimed that Corgan was given the Chief Creative Officer title because he insisted on it when he put money in the first time. Later, when he put money in again, he insisted on being President of the company.
Corgan’s claim was that he had great passion for TNA wrestling and its fans and filing suit was the last thing he wanted to do, but he exhausted every channel to avoid litigation and was forced to sue because of the defendants “repeated willful disregard of their contractual obligations to him.”
Carter’s side claimed that Corgan represented to her that he’d take care of the financing for Bound for Glory and the October tapings, that he claimed Aroluxe and he would strike a deal. She said that he didn’t get any financing. At this point another company (this was WWE) and Carter began talk of a sale. Carter went to Aroluxe and Corgan to see if they would loan TNA the money to do the October tapings, but she couldn’t come to terms with either one. But at the last minute, she did come to terms with Anthem Sports. The claim is that on 9/27, the other company (WWE) offered a purchase price similar to the price Corgan had valued the company a being worth. She said Corgan and Aroluxe never reached a deal and on 9/27, Corgan said he wasn’t going to fund the next set of tapings. They claim that even though Corgan was president, his pulling out left the company in jeopardy because they could lose their TV deals if they didn’t film new shows, and that he made no effort to arrange alternate sources of funding. They claimed at “at near midnight on the eve of the deadline to keep production on schedule,” Carter was able to make the deal with Anthem Sports to save the tapings.
They claim that Corgan realized that his plan to take control of the company was going to file by late September, and that Impact now had other options and suitors, so he started with legal letters saying Carter was in default, with the idea of stopping any sales and by doing so, keeping the company from getting money so they’d be forced to give it to him.
On 10/12, Corgan’s lawyer sent a letter saying he was going to exercise his rights to take over Carter’s voting shares and to remove all the managers of the company and put himself solely in charge. The next day he filed his lawsuit and got his temporary restraining order. They also claimed that during the period he was acting as President, he only twice came to Nashville (8/29 and 8/30, and again on 9/26 and 9/27), and on those visits spent most of his time with the creative team at the production studios and only briefly once came to the business office.
On 10/12, Corgan’s lawyer sent a letter saying he was going to exercise his rights to take over Carter’s voting shares and to remove all the managers of the company and put himself solely in charge. The next day he filed his lawsuit and got his temporary restraining order. They also claimed that during the period he was acting as President, he only twice came to Nashville (8/29 and 8/30, and again on 9/26 and 9/27), and on those visits spent most of his time with the creative team at the production studios and only briefly once came to the business office.
TNA claims he made no attempt to meet with the board to discuss business strategy and that he declined to attend the meeting with talent that Carter had on 10/3 before the second night of tapings.
Carter claimed she asked Corgan why he wasn’t involving anyone else in his meetings and he said, “You are damaged goods. I don’t intend to involve you.”
They also said that Corgan’s attempts to block himself being paid back shows his only motive is to get control of the company. TNA said Carter e-mailed Corgan on 10/17 asking him to consent to Anthem paying him back and that Corgan’s lawyers were in talks about making that deal, but three days late, Corgan asked for more money. They claimed Corgan’s game would be to constantly ask for a higher number to keep from an agreement taking place, and in doing so, with Carter being unable to sell, the company wouldn’t be able to pay bills and continue. They claim that Corgan not agreeing to settle, a provision of the Anthem loan, has strangled business.
Carter claimed she asked Corgan why he wasn’t involving anyone else in his meetings and he said, “You are damaged goods. I don’t intend to involve you.”
They also said that Corgan’s attempts to block himself being paid back shows his only motive is to get control of the company. TNA said Carter e-mailed Corgan on 10/17 asking him to consent to Anthem paying him back and that Corgan’s lawyers were in talks about making that deal, but three days late, Corgan asked for more money. They claimed Corgan’s game would be to constantly ask for a higher number to keep from an agreement taking place, and in doing so, with Carter being unable to sell, the company wouldn’t be able to pay bills and continue. They claim that Corgan not agreeing to settle, a provision of the Anthem loan, has strangled business.
Impact Ventures also argued against the injunction by saying they have the financing to pay Corgan back the full amount of which he is entitled. Corgan responded by saying that the defendants have merely obtained a proposal for financing a portion of the amount Corgan is due, and the financing is based upon conditions that can’t be fulfilled, including obtaining a release from Corgan. The specificity of the release he didn’t state, but it is believed that for Corgan to get his money he’d have to sign a release that he’d take no further legal action against either the company or Carter personally. Corgan obviously did not accept the offer to be bought off, and filed a new and slightly amended lawsuit on 10/25. He is looking for control of the company based on his agreement with Carter where he was to get the company if it was financially insolvent. He claims it is. Carter claims it isn’t, although TNA has cut back on spending to almost an embarrassing degree if you know the details of it.
Debt that we are aware of would be in excess of $4.7 million, which would be debt to Aroluxe, Anthem, and the three entities that have recently filed lawsuits against the company for failing to pay them as agreed to, BankDirect Capital Finance LLC, American Express and Audience of One Productions, LLC. That number doesn’t include Corgan and there are likely other debtors who have not filed suit, one of which ended up being named in court papers, so the actual number is significantly higher.
While the debt isn’t known, Scott Smith, Corgan’s attorney, said that TNA’s financial liabilities have increased 52 percent since June and the debt is even more than that.
At the 10/26 hearing regarding the injunction, Smith said that TNA hasn’t been paying its talent, and while it claims it is due to Corgan’s lawsuit, it’s really because of cash flow problems. He said TNA’s projections show one year of more cash flow problems, and that TNA was in ICU five times this year before people each time bailed them out.
He also said that the figure WWE offered to buy the company was less than its current liabilities, which would seem to indicate the WWE offer being $6 million or less.
At one point during the hearing, Sims mentioned that one of the notes owed to Corgan was for $1.8 million.
At the 10/26 hearing regarding the injunction, Smith said that TNA hasn’t been paying its talent, and while it claims it is due to Corgan’s lawsuit, it’s really because of cash flow problems. He said TNA’s projections show one year of more cash flow problems, and that TNA was in ICU five times this year before people each time bailed them out.
He also said that the figure WWE offered to buy the company was less than its current liabilities, which would seem to indicate the WWE offer being $6 million or less.
At one point during the hearing, Sims mentioned that one of the notes owed to Corgan was for $1.8 million.
Travis Parham, the attorney representing Impact Ventures in opposing the injunction being issued, said the lawsuit was nothing but a scheme by Corgan to take over the company and force Carter out. He blamed the lawsuit for creating a creditor crisis and hurting TNA’s financial standing, however the creditor crisis and lawsuits filed predated Corgan’s lawsuit threat and filing.
With the ruling on Monday, Jason Brown, the CEO of Aroluxe LLC, is now managing the day-to-day activities of Impact Venturers, and TNA is back in business.
With the ruling on Monday, Jason Brown, the CEO of Aroluxe LLC, is now managing the day-to-day activities of Impact Venturers, and TNA is back in business.
Which brings us to Tuesday's breaking news, which can't be a coincidence, and that is the fact that the company's television partner in the United Kingdom, Challenge TV, announced that they would no longer be carrying Impact Wrestling starting in the beginning of next year. Largely due to their TV deals, the UK has been one of the best markets globally for TNA. The promotion has regularly run tours of the UK in front of some of their best crowds of the year, but they haven't yet announced a tour for 2017.
TNA responded to the news on Tuesday with a statement of their own on the company's Facebook page. In the statement, TNA mentioned spoilers as a reason that they would no longer be airing on Challenge and said that they are looking forward to announcing a new opportunity soon that will allow them to air Impact closer to when the show is broadcast in the United States.
You can spin bullshit however way you please, but in the end, it's still shit.
TNA responded to the news on Tuesday with a statement of their own on the company's Facebook page. In the statement, TNA mentioned spoilers as a reason that they would no longer be airing on Challenge and said that they are looking forward to announcing a new opportunity soon that will allow them to air Impact closer to when the show is broadcast in the United States.
You can spin bullshit however way you please, but in the end, it's still shit.