UPDATED: Dixie Carter Denies TNA is Insolvent in Response to Corgan’s Discovery Motion

UPDATE: PWInsider has revealed more from the few documents that were unsealed today as part of Billy Corgan’s lawsuit against TNA. The latest are the response from Dixie Carter and Impact Ventures to a motion filed by Corgan to compel them to provide responses to his discovery requests. The responses deny that TNA is insolvent and object to several of Corgan’s requests for discovery.

Carter has denied that the company is insolvent “as the term is used in the Section 7 (e) (i)” in their Pledge Agreement, saying, “The term ‘insolvent’ is not defined in the Pledge Agreement. Under Tennessee law, an entity is insolvent only if the sum of the debtor’s debts is greater than all of the debtor’s assets, at a fair valuation. Impact Ventures’ assets are of greater value than its debt.”

Carter has also denied that Corgan informed her of a default on September 29th and that Corgan has the right to remove the managers of Impact Ventures, replacing them with his own. She claims that “The transfer of governance rights is invalid under Tennessee law and the Operating Agreement. There has also not been an Event of Default as that term is used in the Pledge Agreement. Impact Ventures LLC has not been insolvent since August 11, 2016 and is not insolvent at present.”

Carter and Impact both argued in their responses that Impact Ventures’ assets are “of greater value than its debt” and Carter has objected to the request for all docuements related to Impact Ventures being insolvent or unable to pay all of its debts in full, all documents sent to or received from WWE or its representatives and all documents sent to or received from “any third party” regarding that party’s potential acquisition of Impact Ventures LLC from January 1st to the current day.

Carter responded that the documents requested are overly broad, not relevent and “not reasonably calculated to lead to the discovery of admissible evidence because it is not limited to any period of time.” She also stated, “Ms. Salinas objects to this request on the grounds that it seeks information that, at least in part, can be obtained from some other source that is more convenient, less burdensome, and/or less expensive, named Plaintiff. Subject to, and waiving that objection, and consistent with the Tennessee Rules of Civil Procedure, Ms. Salinas is producing responsive documents herewith.”

Corgan’s lawyers have argued that since they will not be able to get a deposition from Carter before the October 26th hearing, Corgan “will be left to guess the basis” of the claims that the company is solvent until the defendants file their brief on October 24th. That will give Corgan’s attorneys only forty-eight hours to prepare for the hearing. The filings also note that the defendants have given over 17,000 pages worth of documents that are currently being “reviewed and assessed” by Corgan’s attorneys.

ORIGINAL: A second document that was unsealed from Billy Corgan’s lawsuit against TNA has revealed some new details, including the claim by Billy Corgan’s team that he has the right to remove managers from TNA’s parent company. TNZ reports that a motion for expedited discovery was unsealed and says that Corgan, Dixie Carter and Impact Ventures entered into a “Pledge and Security Agreement” on August 11th. That was the day before Corgan was named president of TNA.

A Security Agreement, for reference, is a contract between a lender and borrower in a secure transaction that gives the lender a security interest in an asset or assets that are pledged as collateral.

The claim also makes not of an “Operating Agreement for Impact Ventures” that was executed on August 7th, though it is not referenced who is on that Operating Agreement. Corgan has asked that TNA, Impact Ventures and Dixie Carter do the following:

* Admit that Impact Ventures is insolvent as specified by the Pledge Agreement.
* Admit that Corgan notified them of a Default under the Pledge Agreement on September 29th
* Admit that Corgan has the right (under the Pledge Agreement) to exercise the voting rights associated with their equity interest in Impact Ventures LLC.
* Admit that Corgan has the right (under both the Pledge Agreement and the Operating Agreement) to remove Impact Ventures’ managers and replace them with designees of Corgan’s choosing.

If the parties do not admit to all of the above, they’re being asked to hand over the following:

* All documents related to Impact Ventures being insolvent or unable to pay all of its debts in full as it came due from January 1, 2016 to the present.
* All documents sent to or received from World Wrestling Entertainment or any of its representatives from January 1, 2016 to present.
* All documents sent to or received from “any third party” regarding that third party’s potential acquisition of Impact Ventures LLC, TNA Entertainment LLC or any of the assets owned by either entity.

Corgan filed the lawsuit on October 12th. There were reports late last month and early this month that WWE was in talks to buy TNA’s tape library; it’s not confirmed if that is what Corgan is seeking information on in regard to the discovery request, though that would be a logical conclusion.

There’s still a lot of information regarding the lawsuit that isn’t known because of the current seal on it. The suit is set to be unsealed (albeit in a redacted form to prevent disclosure of financial terms) next week.