The legal wrangling over The Source magazine continued yesterday (Feb. 23) in a New York courtroom.
New York Supreme Court Judge Richard B. Lowe III granted co-founders Dave Mays and Ray “Benzino” Scott a temporary restraining order preventing the auction of their stock in the company.
The Source’s bank, Textron Financial, is attempting to auction off the remaining 82% of the company that is controlled by Mays and Scott.
The Black Enterprise private equity fund, which is backed by Earl Graves, Sr. and Citigroup, acquired an 18% interest in The Source for $12 million dollars in 2002.
According to Mays and Scott, Textron Financial loaned the magazine another $18 million dollars at the behest of principals from the Black Enterprise equity fund, three months after investing in the magazine.
Mays and Scott filed a multi-million dollar lawsuit against Black Enterprise, claiming the owners conspired to steal the magazine from them.
The pair also say Black Enterprise illegally took control of the Board of Directors of The Source to oust them from their positions as Chief Executive Officer and Chief Brand Executive.