ProElite May Go To Court To Block Public Auction

According to an SEC filing (a public companies' financial statement or other formal document submitted to the US Securities and Exchange Commission) by ProElite, Inc. on Thursday, the company is refusing to close its doors without a fight.

On October 31, the company received a notice from Showtime Networks announcing the sale of ProElite assets at a public auction. On November 4, the cable network made an SEC filing announcing the sale and placed ads on several MMA websites advertising it. Showtime's Senior Vice President of Sports and Event Programming, Ken Hershman, also sits on ProElite's board of directors.

In line with a recent letter to fighter managers promising a return in early 2009, ProElite said it would do everything in its power to stay off the auctioning block.

"The Company plans to take all appropriate measures to prevent the sale from occurring," the filing states. "Such measures may include raising additional financing, filing a lawsuit enjoining the sale, filing a bankruptcy petition or negotiating a settlement with Showtime. There can be no assurances that the company will be successful in any of these actions."

According to some sources, ProElite's first tactic may be to sue CBS Networks over gate revenue produced by its third show, "Heat". The embattled company could argue the network forced them into default on a one million dollar loan from Showtime by misrouting the funds from the Sunrise, Florida, show.

A condition of Showtime's loan, dated June 18, said ProElite's assets could be sold or taken over if it did not maintain $550,000 in cash reserves.

"CBS took the gate revenue directly from Miami, and it was contracted to go through ProElite first," a source said. "If that had happened at the time that (Showtime) called in the note, there would have been enough money that they couldn't have called in the note. So there's a legal argument there."

"ProElite's claim would be that they could have raised the money in that time, but once Showtime called in that note, publicly, it ruined any chances of raising money."

An SEC filing on December 9 detailed an agreement between CBS and ProElite where CBS would cover all costs associated with the show, and "receive" all revenue from the event, though details on how that would occur were not specified.

The question now is whether ProElite can afford to go to battle with CBS in a civil court.

Requests to CBS and ProElite representatives asking for comment were not immediately returned.

The auction, however, could possibly determine the futures of fighters like Kimbo Slice, Gina Carano, Jake Shields, Robbie Lawler, Frank Shamrock, Nick Diaz, Cristiane Santos, Yves Edwards, Wilson Reis and many others.