Nate Rau

nrau@tennessean.com

Billy Corgan is either the white knight who kept TNA wrestling alive when it couldn’t afford to tape new episodes of its weekly program, or a predatory loan shark who embarked on a diabolical scheme to take control of the Nashville-based promotion.

Those were the opposing views offered up by lawyers in a Nashville courtroom on Wednesday in the lawsuit pitting Corgan against TNA and the chairwoman of its board Dixie Carter.

Corgan is best known as the frontman of the Smashing Pumpkins, but he’s invested in and helped run wrestling promotions and began at TNA in 2015. Carter, who unlike Corgan was in the court room on Wednesday, has run TNA for several years.

The hearing played out like an intriguing professional wrestling match, with control of the company hanging in the balance.

Corgan’s attorney, Scott Sims, argued that his client staved off creditors and gave TNA the cash flow it needed to pay for productions on two occasions in 2016. As part of those loan deals, Corgan rose to the title of president, but he wasn’t given operating control of TNA.

For the third loan, Corgan entered into a loan agreement with Carter in which he would gain her board of directors voting rights – 92.5 percent – if the company became insolvent. In court on Wednesday, Sims argued that TNA is insolvent and fails the “cash flow test” because it can’t pay its bills.

There are two legal questions in front of Chancellor Ellen Hobbs Lyle, who is considering whether to grant a temporary injunction that would effectively grant control of TNA to Corgan. The first is whether such a loan agreement is legal under Tennessee law. The second is whether TNA is insolvent.

Travis Parham, attorney for TNA, claimed that such loan agreements are not legal and therefore the question of insolvency is moot.

Parham argued that Corgan held TNA and Carter over the barrel in order to get access to the cash he was offering. He said Corgan offered lending terms that would “make a loan shark blush.” Financial details in the lawsuit have been redacted and under Hobbs Lyle’s orders, the attorneys carefully did not cite dollar figures or other details in court on Wednesday.

Parham also argued that even if Corgan’s loan agreement with Carter is legal, that TNA is not insolvent. He said the company is facing a long-anticipated cash flow problem, but has fielded lucrative offers to be sold. The WWE, the largest wrestling promotion in the world, is among those that have made offers.

Anthem, the Toronto-based company that owns licensing rights to TNA’s lucrative video library, said through an attorney on Wednesday it is willing to pay off Corgan’s loan, minus the transaction fee he says he is due. Anthem is the senior creditor for TNA and a member of its ownership group.

Hobbs Lyle said she will issue her opinion on Monday. If Corgan wins, he will take the reins of TNA. If he loses, it is most likely that he will pursue other legal battles and face the prospect of having his loan paid off with interest. Corgan is able to convert the debt he is owed to equity in the company, up to 36 percent.

Reach Nate Rau at 615-259-8094 or follow him on Twitter @tnnaterau.