Billy Corgan’s attorney Scott Sims told The Tennessean newspaper that his client is ready to present his case in its entirety to the court at a later date, meaning that the lawsuit against TNA and its principal officers will go ahead as planned.
“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,” the statement from Sims said.
Chancellor Ellen Hobbs Lyle yesterday ruled that the loan agreement between Corgan and Dixie Carter was nonbinding under Tennessee law and therefore he is not entitled to evoke a clause that would have given him control of TNA.
The Chancellor said that Corgan’s claims that TNA was insolvent were ambiguous, so combined with the illegal loan agreement, she had to reject Corgan’s motion for an injunction.
“The (relevant section) of the pledge agreement, the court concludes, was not implemented in accordance with Tennessee law and the LLC operating agreement, and Section 6 is, therefore, unenforceable to remove the defendant LLC managers,” Hobbs Lyled said in her ruling. “As to the occurrence of a default by way of insolvency, there has not been demonstrated a substantial likelihood of success on the merits because the operative text of the pledge agreement, ‘becomes insolvent,’ is ambiguous when applied to the facts of record.”
Billy Corgan, who gave TNA three loans, is supposed to get paid back his money by today according to his agreement with Dixie Carter. He also has the right to convert the debt into equity in the company, which amounts to around 36%.