It’s fitting that the immediate fate of the lumbering corpse that is TNA will be decided on Halloween. But after yesterday’s court room drama between Billy Corgan and TNA — who will get the treat, and who will be left feeling tricked?

Halloween puns aside, here is a quick overview of what is known – and what is not – after the hearing:

  • Billy Corgan does not own ANY shares of Impact Ventures, the parent company of TNA
  • Corgan is only a creditor
  • Corgan is looking to enforce a share pledge agreement entered into between he and Dixie Carter
  • TNA is alleging that they are not insolvent and that the share pledge agreement is unenforceable

First off, let me say the following: fully rational actors do everything possible to avoid a dispute ending up in front of a judge. Once it is there, you have no control over how it ends up being resolved. Once emotion is involved though, few people remain fully rational. In this situation, where people are arguing over control of a failing wrestling company, there is not a lot of rational actors.

That being said, based on the snippets of written and oral argument available, neither party is completely baseless in their respective position, though I do have a guess what the outcome here will be. It is however, just a guess. As will be discussed below, the key documents in dispute here remain redacted, so there it is next to impossible to be sure either way.

What Corgan was seeking yesterday was to have an injunction put in place which would stop Impact Ventures from divesting its assets or, effectively, doing anything without Corgan’s consent. While his pleadings labelled this a ‘permanent injunction’, in reality it would only be granted until the issues are resolved.

Corgan already has in place a temporary restraining order. Contrary to what has been reported by Dave Meltzer in this week’s Wrestlling Observer, the temporary restraining order was not granted on the basis that a judge thought Corgan was likely to prevail at trial. That reasoning is more akin to that used in granting an injunction. So much so, that typically in a case like this, obtaining the injunction will lead to a quick settlement of the issues. Obtaining a temporary restraining order just holds things in place until the court can rule on the injunction.

For the purposes of the injunction, the ONLY thing that the court is going to be particularly concerned about is the share pledge. Corgan owns no shares in Impact Ventures, and his only claim to ownership currently comes from the share pledge. I would venture more thoughts about this pledge, but it remains redacted from the court record and therefore we are limited to what the two parties have claimed about it. Both would have reasons for presenting the document in light more beneficial to their clients, so only so much weight can be put on their arguments.

One issue which may be determinative is the claim by TNA that the share pledge is not enforceable by Tennessee law.

If ownership/control of the shares cannot be transferred by such an agreement, Corgan has no case. This would not necessarily be a case of TNA/Carter pulling a con, rather a case of parties not understanding what they can and cannot contract to do.

As for the pleadings themselves, Corgan’s  seem a bit disjointed and unclear. They label him an investor, but then state that investment was a loan.

Negotiated into the loan agreement, he gets the president position. That is odd. And finally, seemingly separate from the loan agreement, but a prerequisite to him providing the third round  of financing, Carter provided a share pledge agreement. Part of the conditions of the pledge is that, should Impact become insolvent, Corgan could take voting rights of the shares. The pleadings are unclear if he is to obtain full ownership of Carter’s share, or just ‘control’. If that sounds odd, the fact it is not clear in the pleadings also is. I assume the share pledge itself is more clear.

Impact’s response  lays out a more coherent tale of corporate officers willing to do anything to keep the company going long enough to sell it, and Corgan taking advantage of that situation to drive an improvident bargain. Most importantly, they argue TNA is not insolvent.

A lot turns on this insolvency issue. Corgan clearly knew there were cash flow issues every time he lent money. It is WHY he was lending them money. The court will likely frown upon him then claiming he did not know about the depth of the issues. While Corgan is claiming that he did not know the extent of the debt Impact had incurred, this may not be the proper venue for that argument. He has not made any claim for fraud or misrepresentation – he is just asking for the agreements he signed to be executed in the manner he thinks they should be. Essentially, he is saying he did not perform sufficient due diligence prior to lending (three times) and is now upset about it. Or, conversely, he is saying TNA concealed facts from him, which would be grounds for allegations of fraud. Those issues do not revolve around him getting ownership of the company.

The loan agreement(s) stated that he could turn his debt into an ownership stake. As the loan agreements are also redacted, under what conditions he could do so are unknown. However, it is clear that TNA has the money to pay his loans back in full at the moment. If that was offered prior to the date where Corgan could convert the debt into shares, which seems to be the case, he is likely SOL.

An important point here – TNA is not looking to “buy out” Corgan. Corgan has nothing to buy. What they are looking to do is pay back his loan. Which, ironically, is part of the relief he appears to be asking the court to provide.

This leads to the next point – irreparable harm. This is harm of the sort other than can be compensated for monetarily and is a requirement to obtain an injunction. I do not think Corgan has jumped this hurdle. All his complaints are easily quantifiable and can be compensated for if proven.

A further problem facing Corgan in attempting to get this injunction preventing TNA from operating without his consent is that it essentially gives him exactly what he is seeking at trial – control of the company. He would be able to basically dictate terms to Impact Ventures, who would be hampered from doing ANYTHING without Corgan’s consent. Since he is/was a potential buyer of the company, this create problems. Also, it could mean the company goes into a stand still in which case it becomes worthless.

If you have read this far, you can probably guess what I think will happen Monday.

TNA is a cockroach, and it will yet again survive Armageddon.