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Impact Wrestling (formerly TNA) admitted before the U.S. District Court, Eastern District of Virginia that the company indeed breached their deal with former production company Audience of One Productions, LLC and that their Repayment Agreement with AO1 was a "valid and enforceable" contract in a filing on 4/14.
As part of that admission, Impact Wrestling agreed that the remaining balance they owed AO1 would be paid immediately, plus interest. Impact agreed to pay AO1 $336,602. The court officially closed the lawsuit yesterday with prejudice, which means that as long as AO1 is paid in full, they could not bring new claims against the company.
Audience of One's lawsuit, filed in September 2016, claimed that TNA's Chief Financial Officer Dean Broadhead and Impact Ventures worked to get them on board under the false pretense of using them full-time as Impact's production company, only to then fail to pay them in a timely fashion for work done, requiring the set up of an agreed upon payment plan. According to the lawsuit, Impact allegedly stopped paying after the first initial payment installment was made. Impact admitted to that breach in court.
At the time, The lawsuit stated that Impact Wrestling began conversations with AO1 Productions in 2015 about "a possible long-term, multi-event, production services agreement, pursuant to which AOl would provide a variety of production services for live TNA professional wrestling events, including audio/visual and broadcasting work, lighting, set construction and breakdown, as well as retention and payment of audience "wranglers" (personnel who would patrol the crowd and try to engage audience members with the event), among other things."
The lawsuit stated that before and during the negotiations between the two companies, TNA production was overseen by Ron and Don Harris and "Upon information and belief, the Harris Brothers were not providing sufficiently high-quality production work to TNA, despite their industry experience. AOl understood that one of the reasons TNA initially sought a long-term business relationship with AOl was [Dean] Broadhead's dissatisfaction with production services work previously provided by the Harris Brothers."
The two sides began working together specifically on Universal Studios tapings, with the lawsuit alleging that "Broadhead and Ron Harris consistently represented to AOl that these two events were the first of many and that TNA and AOl were on the verge of a long and fruitful relationship." TNA came to AO1 and hired them to produce the 2015 Bound for Glory PPV, despite the fact that "TNA was apparently in dire financial straits at the time of these negotiations, with reports in the media suggesting that, among other financial woes, TNA was behind on paying some of its key "talent," i.e., wrestling personnel."
After the show, A01 billed Impact Wrestling for $223,000 for services rendered in October. The following month, the lawsuit alleges that Broadhead, in an email to A01, stated that TNA was working on finalizing a new TNA deal that would put the company in 80 million homes and stated, "We are planning to go back into Universal Studios in 2016 and get back on the right track with our production. Please, please hang in there with us. We will come out of these difficult times in a much better position as a company and a partner." A01 alleges this email was sent to prevent them from moving to more aggressive collection attempts on the money owed.
The lawsuit alleges that A01 sent a second invoice, including a 1.5% late fee in November, which led to Ron Harris requesting an itemized invoice before A01 could be paid. The communications included discussions on a new set design, A01 alleges in their lawsuit that Impact was having discussions with other vendors at the same time.
In January 2016, A01 reduced the amount Impact owed them by $29,001.57, noting that that amount was removed as Dean Broadhead directly paid some of the independent contractors who had worked on Bound for Glory production, so A01 no longer needed to pay those contractors themselves. A01 alleged in the lawsuit that Impact made those payments directly to insure that those contractors would continue to work for Impact after Impact cut ties from A01.
The lawsuit also alleged that Broadhead opened into discussions with Jeff Wade, the owner of A01, regarding a payment plan to begin to reimburse A01 for money owed from the Bound for Glory event. Based on the agreement, the money would be paid in monthly installments starting in March 2016 through August 2016, and that Impact stated they were "on track" to begin to make payments. However, the lawsuit alleges, "Upon information and belief, TNA's financial troubles had become increasingly severe by this time. Yet, here again, Broadhead, who would have been intimately familiar with those financial troubles, failed to share any relevant information with AOl, which, for its part, continued to negotiate in good faith with TNA and Broadhead over repayment terms for the BFG Event."
The lawsuit claims that in March 2016, "Aroluxe provided some form of financing to TNA which, upon information and belief, was sufficient to allow TNA to continue operating for the foreseeable future. This financing was secured with a lien on all or nearly all of TNA's assets, including, but not limited to, all accounts receivable as well as all fixtures, inventory, and equipment."
The lawsuit then alleged that financing "gave Aroluxe and, by extension, the Harris Brothers, two of Aroluxe's principals, considerable incentive to oversee and coordinate TNA's financial affairs going forward." on 3/18/16, TNA was to wire the first payment but 12 hours later, Broadhead told A01 that the company could not wire the money. The money was later received via FedEx. The lawsuit alleges, "Upon information and belief, this failure to make a timely wire transfer to AOl resulted from intervention by Aroluxe and/or Ron Harris who, at this point, had every incentive to disrupt and delay payments to AOl so that other creditors could be paid sooner."
From that point on, Impact stopped responding to invoices regarding money owed to A01, according to the lawsuit.
At the time it was filed, the suit allegd that Broadhead and Harris were responsible for dragging out payment with false promises of future work as a way to get AO1 to agree to the repayment plan, which Impact did not maintain.
Over the course of the lawsuit, Aroluxe and Ron Harris were dismissed as defendants after providing declarations to the court that they were not involved directly in the situation. That left Impact Wrestling and Dean Broadhead on the hook as the lone defendants.
On 4/13, a declaration filed before the court by Anthem Media's Ed Nordholm noted that the Impact Board of Managers were made up of Anthem, Aroluxe and Dixie Carter.
Audience of One was seeking $223,000 plus interest and post-judgment costs for breach of contract and for the defendants violating Virginia code. Obviously, they have emerged victorious in those efforts. The lawsuit was filed prior to Anthem Media acquiring the majority ownership in the company.
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