Is Billy Corgan Withdrawing His Lawsuit Against TNA Wrestling?

Nov 1, 2016

UPDATE x 2: As expected, Billy Corgan isn’t done with his lawsuit against TNA Wrestling. Corgan’s lawyer told The Tennessean that Corgan has no intention of withdrawing his lawsuit against the company in the wake of his requested injunction being denied.

Corgan’s lawyer said, “Mr. Corgan understands that temporary injunctive relief is an extraordinary remedy and, due to the nature of the proceedings, he did not have full access to information in the defendants’ possession that bears on the issues in this case. Mr. Corgan looks forward to the opportunity to conduct full discovery into these matters and present his case in its entirety to the Court at a later date.”

In addition, as of Monday evening, Corgan’s loan has yet to be repaid. The company has until the end of the day on November 1st (today) to repay the loan or TNA may end up in trouble again.

UPDATE: PWInsider has more on a judge denying Billy Corgan’s request for a temporary injunction against TNA and shooting down his temporary restraining order among them. In the nineteen-page ruling issued by Chancellor Ellen Hobbs, the judge says that Corgan needs to show a substantial likelihood of success in his claim against TNA as well as immediate and irreperable harm, a balancing of the company’s equity in his favor and that the injunction wouldn’t be harmful to the public interest.

The court ruled that Corgan didn’t prove that TNA’s defense was meritless, that a default happened under the pledge agreement between the two parties, that Corgan could gain control of Dixie Carter’s voting rights should a default occure or that Corgan is owned more due to a corporate transaction. As such, the court is not in 100% agreement with Corgan and can’t levy an injunction against Carter, TNA, Impact Ventures, Dean Broadhead and Serg Salinas.

The Chancellor said that she agreed with TNA’s argument that the voting rights provision within the pledge agreement was not in accordance with Tennessee law and as such is unenforceable. Corgan does not have the right to remove Dixie and the others from Impact Ventures’ board. Hobbs also said that the Pledge Agreement’s condition of insolvency is “ambiguous when applied to the facts of record.” As such, they have to go with the definition of insolvence within the agreement itself and that is not clear. This means the court cannot make a ruling that Impact Ventures is insolvent.

The court also did not “adopt” TNA’s claim that potential money coming in from possible purchasers to buy Impact Ventures “or some of its assets” is refutation of the insolvency standards that Corgan presented and that because of the particular facts in this case, the usual process that might be used didn’t apply. It is difficult to define that the company is insolvent because the Pledge Agreement was enterted into when TNA had financial issues. Hobbs noted that even Broadhead stated on the record that without Corgan’s assistance, “all would have been lost.”

In other words, the court said that Corgan cannot prove that TNA is insolvent because it’s was in such financial trouble when the agreement was signed and because of the agreement’s wording, there’s not currently a way to prove they are worse off now than they were at the time of the agreement.

In addition, it was said that it is “not clearly established on the record” that Carter, TNA, Impact Ventures, etc. breached their agreement with Corgan by witholding information, as Corgan asserted. Instead the court said that both sides have a side of the story and there’s no proof which side is accurate. It was noted that Corgan may be able to win at trial if he provides evident but there’s no hard proof right now. The Corporate Transaction fee that Corgan says he is owed — an additional $900,000 — was ruled to not be owed because there’s no proof the company has been acquired by another party.

The ruling that while Corgan is still technically president of TNA, he likely won’t be for long. TNA is now free to continue operations without having to pass things by Corgan and the current board of directors are still in power.

At this point, Corgan is free to move ahead with the lawsuit and TNA is required to pay Corgan back on his loan of $1.8 million by tomorrow. Since Anthem Media has said they’re willing to pay Corgan bvack, that will likely happen and Corgan will not be able to convert his debt into a 35% ownership stake in the company. It could technically happen today but doesn’t seem likely.

TNA will likely move ahead with plans that see Anthem take over the company from Dixie Carter with Aroluxe CEO Jason Broan being named the CEO of TNA as well. Carter will likely stay on as a minority owner and as an on-air personality, with the current belief that Anthem will own 85% of the company, Aroluxe will own 10% and Carter will own 5% (based on the documentation uncovered in discovery during the lawsuit).

Corgan has hinted that there are more legal actions coming, so this certainly isn’t over yet. If he exits, it will be a difficult situation in the locker room because TNA is again behind on pay and Carter told the company that she wouldn’t not let TNA be sold to WWE, but it has been proven she had already had several talks about a potential sale at that point. Corgan was also popular with the talent, creating what is likely to be a lot of tension.

Corgan took to Twitter to comment on the ruling, posting:

For those asking, I'm in no way disappointed in the judges ruling regarding TNA. Rather, I'm grateful the judge considered the case

— WPC (@Billy) October 31, 2016

It's important to note is these proceedings have brought forth facts which illuminate business practices I have fought against for a reason

— WPC (@Billy) October 31, 2016

And I suggest that a careful reading on the judge's ruling supports there can be no claim of victory by anyone in a position of authority

— WPC (@Billy) October 31, 2016

ORIGINAL: The Nashville Chancery Court has denied Billy Corgan’s request for a temporary injunction against Dixie Carter, Serg Salinas, Dean Broadhead, Impact Ventures LLC. Due to the ruling, they have also dissolved Corgan’s temporary restraining order against the company.

This means that Corgan will not gain control of TNA and that the current management can move forward to make plans and choices for the company without his approval.

TNA will still have to repay Corgan’s loan of $1.8 million. That is unless Corgan chooses to convert that debt into a 36% ownership stake in the company.