TNA News: More details on bankruptcy, company possibly dissolving due to debt
TNA may be days away from closing its doors
When it seems that the recent woes for Total Nonstop Action wrestling could not get any worse, yet another issue has surfaced regarding the status of their company. Previous reports show that the company is being sued by Audience of One Productions for an outstanding balance due to shows being unpaid, as well as the state of Tennessee for unpaid taxes. In addition, American Express threw its hat in the lawsuit picture, due to TNA refusing to pay outstanding credit card debt used to keep the company afloat.
To make matters even worse, money is owed to TNA President Billy Corgan, which resulted in yet another active lawsuit. With these issues continuing to pile up, Dave Meltzer of the Wrestling Observer stated in a recent commentary about the company’s future that TNA is indeed expected to file either a Chapter 7 or a Chapter 11 bankruptcy.
If the company files a Chapter 11, it would – in theory – still be able to stay active. Per Chapter 11 rules, a company has an ability to rehabilitate the debt and make adjustments in order to pay the debts off to the creditors. According to Investopedia, “rather than selling off all assets to pay bank creditors, the trustee supervises the assets of the debtor and allows business to continue.” Of course, this would based on full rehabilitation of debt, which is obviously something that TNA is struggling with.
If Dixie Carter and company are at the point of understanding that this debt is over their heads and impossible to repair, then a Chapter 7 – or “liquidation” – bankruptcy would be filed. Unfortunately, in this case, all of their assets would be distributed to the appropriate creditors in order to pay off their debts. Since the company is considered an asset, it would also have to be liquidated, resulting in it being forced to fold.
Whether it is a Chapter 7 or Chapter 11, the brand of TNA and Impact Wrestling is just about damaged beyond repair. Sadly, there is so much great talent in the company, and many will not be able to gain the same financial status as wrestling for a company who had revenue coming in from ways that independent promotions cannot get.
On the contrary, this may be a good thing for the current talent, as a number of wrestlers have stated that there are talent who is not current in their pay. Hopefully, WWE can see the talent represented in the company, and bring them in to add a stronger dynamic to the NXT brand.
Whether it is bringing in Hulk Hogan and Eric Bischoff, or Dixie Carter refusing to sell the company despite having the opportunity, the company looks to be on the same route as ECW during its dying days. Competition among wrestling organizations make the sport stronger. However, TNA may be days away from closing its doors.