The Source co-owners David Mays and Ray “Benzino” Scott obtained a temporary restraining order against The Source Entertainment Inc.'s board of directors yesterday (Jan. 12), in an attempt to stop The Board from ousting them from the company.
Mays and Scott were given 48 hours to appear at a special meeting called yesterday by The Source Entertainment Inc., the parent company of The Source magazine.
The Board is attempting to boot Mays and Scott from the company, claiming their involvement in the company hurts “not only the employees of The Source, but all of its investors, vendors, subscribers and readers.”
“The Board unanimously concluded that various acts of mismanagement and breaches of fiduciary duties to the Company by both David Mays and Raymond Scott, who head the company, were in violation of their employment contract, and that cause existed for their termination,” The Board said in a statement released to AllHipHop.com.
Mays and Scott however, obtained a temporary restraining order against the Board of Directors. "They can want to do that all they want, but it's not happening," Mays told The New York Post.
The magazine defaulted on an $18 million loan from Textron Financial Partners last year. Textron filed a lawsuit in Oct. of 2005, asking The Source to be placed into receivership.
The Black Enterprise/Greenwich Street Corporate Growth Partners L.P. is a $91 million private equity investment fund created in 1997 to finance the growth of established minority-owned, managed, or targeted businesses.
Black Enterprise invested an initial $12 million dollars in The Source in return for a minority stake and seats on the board of directors.
In order to qualify for the fund, businesses must have at least $10 million in annual revenue.
“To date, the once highly profitable publication has been sued by its primary lender, Textron Financial Corporation of Providence, R.I., for failure to meet ongoing financial obligations, have been evicted from their offices, and owe $9-12 million to various vendors,” the Board of Directors continued. “The Board decided this was the only feasible course of action as Mays and Scott could not continue their series of financial recklessness and negligence that, in the end, hurts not only the employees of The Source, but all of its investors, vendors, subscribers and readers.”
The Board is attempting to permanently implement internal management changes, which “will restore The Source to greater profitability while allowing the publication to regain the prominence it once enjoyed within the industry and by its readers.”
Source: AHH.com
Mays and Scott were given 48 hours to appear at a special meeting called yesterday by The Source Entertainment Inc., the parent company of The Source magazine.
The Board is attempting to boot Mays and Scott from the company, claiming their involvement in the company hurts “not only the employees of The Source, but all of its investors, vendors, subscribers and readers.”
“The Board unanimously concluded that various acts of mismanagement and breaches of fiduciary duties to the Company by both David Mays and Raymond Scott, who head the company, were in violation of their employment contract, and that cause existed for their termination,” The Board said in a statement released to AllHipHop.com.
Mays and Scott however, obtained a temporary restraining order against the Board of Directors. "They can want to do that all they want, but it's not happening," Mays told The New York Post.
The magazine defaulted on an $18 million loan from Textron Financial Partners last year. Textron filed a lawsuit in Oct. of 2005, asking The Source to be placed into receivership.
The Black Enterprise/Greenwich Street Corporate Growth Partners L.P. is a $91 million private equity investment fund created in 1997 to finance the growth of established minority-owned, managed, or targeted businesses.
Black Enterprise invested an initial $12 million dollars in The Source in return for a minority stake and seats on the board of directors.
In order to qualify for the fund, businesses must have at least $10 million in annual revenue.
“To date, the once highly profitable publication has been sued by its primary lender, Textron Financial Corporation of Providence, R.I., for failure to meet ongoing financial obligations, have been evicted from their offices, and owe $9-12 million to various vendors,” the Board of Directors continued. “The Board decided this was the only feasible course of action as Mays and Scott could not continue their series of financial recklessness and negligence that, in the end, hurts not only the employees of The Source, but all of its investors, vendors, subscribers and readers.”
The Board is attempting to permanently implement internal management changes, which “will restore The Source to greater profitability while allowing the publication to regain the prominence it once enjoyed within the industry and by its readers.”
Source: AHH.com
