Judge Upholds Temporary Restraining Order In Source Magazine Lawsuit

A New York Supreme Court judge ruled to uphold a temporary injunction against Black Enterprise and Textron Financial…

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."


for Black Enterprise were not available at press time.