As noted, there is a hearing this afternoon between Billy Corgan and TNA at the Chancery Court in Nashville, TN. Nate Rau of The Tennessean is at the hearing, and live tweeted ( @tnnaterau ) the following from the hearing from Corgan's side. TNA is up next, and we will have details from them shortly in a separate post:
* Dixie Carter is at the hearing, but Corgan isn't. Corgan is being represented by his attorney Scott Sims.
Here is some background on today's hearing. https://t.co/U8ffgjuqLL— Nate Rau (@tnnaterau) October 26, 2016
* Sims began and said that Corgan saved the company on three separate occasions, but TNA did not hold up their end of the deal.
* Corgan and Carter entered a pledge agreement that included an insolvency clause, and proving that is a crucial part of the lawsuit.
Sims says Corgan and Carter entered pledge agreement that included insolvency cause. Proving this is crucial part of lawsuit.— Nate Rau (@tnnaterau) October 26, 2016
* Sims stated that TNA misled Corgan about their debts. Corgan was named President of the company, but was excluded from management decision.
* Sims said that there is no doubt that TNA is insolvent.
"We basically have a pledge with a voting proxy," Sims says. TNA argues that a transfer of ownership to Corgan was never approved.— Nate Rau (@tnnaterau) October 26, 2016
Chancellor asking Sims about Corgans desire to remove managers. "Does that fit circumstance of a proxy?" She's pushing back at key argument.— Nate Rau (@tnnaterau) October 26, 2016
* Rau noted that Dixie is watching without showing any emotion.
* While both sides have agreed not to disclose redacted financial details, Sims said that TNA fails the balance sheet test and the cash flow test.
Sims says TNA "has required new infusions of cash to produce new" Impact shows.— Nate Rau (@tnnaterau) October 26, 2016
* It was noted that TNA is not paying their bills as their financial condition is the same as when Corgan signed the pledge agreement.
* Sims said that Corgan didn't know of TNA's financial situation when he invested them.
* TNA is not paying their talent and are blaming this lawsuit. Sims said that it's not true, and that the company is insolvent beyond a shadow of a doubt based on the cash flow test (when a company is unable to pay its debts as they fall due).
* Sims said that TNA has 52% more liabilities than the June balance sheet, and argued that the total debts are higher.
Chancellor asks about short term need for cash vs long term value of TNA.— Nate Rau (@tnnaterau) October 26, 2016
Sims says 1. Cash flow deficit has been in existence since at least June. 2. Pro forma shows 1 year of large cash flow deficits facing TNA.— Nate Rau (@tnnaterau) October 26, 2016
* Sims said that management has put TNA in ICU at least five times this year.
Sims it is noteworthy they havent produced schedule of liabilities. He implies TNA is hiding something.— Nate Rau (@tnnaterau) October 26, 2016
* Sims said that the unpaid tax bill is unknown.
* There has been no effort to assign value to their assets, like the video library.
* Sims discussed the WWE negotiations and claims that WWE lowered their first offer. The current offer counts noncompete clauses.
* Sims said that WWE's offer is lower than Corgan's estimate of TNA's liabilities.
Just because WWE and others have offered investment in TNA does not prove company is not insolvent— Nate Rau (@tnnaterau) October 26, 2016
Is TNA a solid company worth millions or insolvent company contractually obligated to transfer power to Corgan.— Nate Rau (@tnnaterau) October 26, 2016
* It was noted that Sims "seemed to slip" and said that one of the promissory notes to TNA from Anthem Sports & Entertainment Corporation (parent company of the Fight Network) was $1.8 million, which owns the licensing rights to its video library.
* Sims said that Dixie made an offer for Corgan to buy her out, and everyone is trying to make a deal.
* Sims said that Dixie emailed WWE to say that she won't see to them until Corgan is out.
TNA's lawyers are up next, we will have details from that momentarily...