Board Of Directors Attempt To Oust Dave Mays & Benzino From The Source

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


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.”