The first hearing on the case was delayed until next week, but some of the documents in Billy Corgan’s lawsuit against TNA’s parent company were unsealed on Friday, Oct. 21. SEScoops reported details - primarily from the restraining order the Smashing Pumpkins frontman filed on Oct. 13 and the motion to compel discovery (designed to force TNA officials to testify and produce documents shedding light on their financial picture and how that was represented in dealings with Corgan).
The restraining order is basically to prohibit TNA from “taking any action without the consent of” Corgan - mostly signing new contracts, but also selling off assets such as the tape library. Next Wednesday’s hearing, his team will be asking for this temporary order to be turned into a full injunction against such actions.
From the information Billy’s legal team is hoping to gather under the discovery motion, we can discern more about the suit itself (Corgan’s initial complaint is still sealed):
- TNA claims to have not been insolvent (insolvency would mean the company’s debt exposure is greater than the value of the company and its holdings) since Aug. 11.
- That claim is important because under the “equity pledge agreement” in place between Corgan and the company, if TNA defaults on its loans or becomes insolvent, Billy assumes the voting rights on Dixie Carter’s shares and could remove the Impact Ventures (TNA’s current parent company) management team and replace them with his own people.
- On the Thursday before Bound for Glory (Sept. 29), Corgan informed TNA he was exercising his rights under the agreement due to “multiple events of default”. The Audience of One Productions lawsuit was filed a couple days before that, and was almost certainly one of the events.
- TNA’s denial of insolvency (which, given what we know about their debt position, is a claim David Bixenspan at SEScoops logically infers to mean there’s a disagreement over the value of the tape library) was likely used to reject Billy’s pre-BFG move to take over as majority owner. It appears it was at that point he began filing the lawsuit.
There’s still a lot more we don’t know, and I’m far from an expert in the business law this case will obviously hinge upon. If the discovery motion is successful, we’ll have a lot more information to dig through. In any event, it doesn’t appear these issues will be resolved any time soon.