A New York Supreme
Court judge ruled to uphold a temporary injunction against Black Enterprise
and Textron Financial Corp. in the on going battle
for The Source magazine on Friday (Mar. 3).
Judge Richard B.
Lowe III upheld a temporary injunction granted last month, preventing Mays and
Scott’s shares of the company from being sold.
Textron Financial,
The Source’s bank, was attempting to auction the 82% majority share that
the magazine’s co-founders and chief executives, David Mays and Ray Benzino,
still control.
"We are pleased
with what happened," The Source co-founder Dave Mays told AllHipHop.com.
"It’s significant step in the lawsuit that we brought and we are looking
forward to taking the next couple of steps to getting things resolved and to
get The Source out of the nonsense that’s been distracting the company."
Mays and Scott
filed a multi-million dollar lawsuit against the Black Enterprise Greenwich
Street private equity fund in Feb., claiming board members colluded to steal
the magazine and illegally outsted the pair from their executive positions.
In April of 2002
The Black Enterprise Greenwich Street Fund acquired 18% of The Source
for $12 million dollars.
Mays and Scott
said Textron Financial loaned the magazine another $18 million dollars three
months after closing the Black Enterprise deal, at the behest of principals
from Black Enterprise.
In January, Mays
was terminated as CEO of the company, while Scott was fired from his position
as president. The two were replaced by Jeremy Miller, current CEO/president,
former COO and a longtime employee of the magazine.
Shortly after the
lawsuit, Textron Financial attempted to auction Mays and Scott’s shares in the
company but on Feb. 23, Judge Lowe granted a temporary injunction preventing
the sale of the stock, while he reviewed the facts in the case.
In early February,
Mays retained the law firm of Cole, Schotz, Meisel, Forman & Leonard P.A.,
to help regain control of the magazine he founded in 1988 out of his Harvard
University dorm room.
The injunction
will remain in place while the judge prepares his first written decision in
the multi-million dollar lawsuit, which also seeks to have Mays and Scott reinstated
to their positions in the company.
"We’ve never
given up our positions in the company, we have maintained that fact that we
are 82% owners. It’s suffice to say that the ruling was another successful step
[in] exposing some of the stuff that’s been going on behind the scenes,"
Mays continued. "When I got in the business with Black Enterprise, I trusted
them and thought they were in it for the betterment of both parties. It’s unfortunate
to see it has come to this point."
Miller, the current
CEO said that the chances were slim that Mays and Scott would ever return to
the magazine on a day-to-day basis.
"I believe
in the legal team Black Enterprise group has assembled," Miller said. "We
have complete confidence that any legal maneuvers that Dave and Benzino will
attempt in the future will be shut down."
Representatives
for Black Enterprise were not available at press time.
