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.

The organization, whose last show featured a 14-second fight, calls it quits after losing $55 million.

It looks like Elite XC, the upstart mixed martial arts organization featuring Kimbo Slice, is down for the count.

ProElite, Inc., Elite XC's Los Angeles-based parent company, plans to file for bankruptcy, said T. Jay Thompson, an Elite XC executive consultant, whose Hawaii-based MMA organization was purchased by ProElite last year.

Elite XC has also informed fighters, office staff and others of immediate layoffs and has canceled fight dates, including a Nov. 8 card in Reno, Thompson said.

In an SEC filing Tuesday, ProElite said that Showtime Networks said it was in violation of a debt covenant because the MMA firm doesn't have enough cash on hand. ProElite has reported $55 million in net losses since January 2007, according to SEC filings.

Several ProElite executives declined to comment Tuesday.

"If I had to point fingers why this thing went bad, I'd have trouble, because I only have two hands," said Thompson.

ProElite, which opened two years ago, appointed boxing promoter Gary Shaw as president and he designated his son, Jared Shaw -- known by the nickname "$kala" -- a key executive with matchmaking powers.

Gary Shaw, who saw his role change from president to consultant this year, said Tuesday he "wasn't even a consultant anymore. I have no comment. I don't know anything about it. I don't know if they're done."

In another SEC filing, Pro- Elite acknowledged significant deficiencies in how it was operated, including wasteful spending by management and a finding that contracts it entered into were not adequately reviewed.

Thompson said he believes the company's fate was sealed when Slice, its biggest star, was knocked out in 14 seconds of the main event of a CBS show Oct. 4.

Slice was supposed to fight MMA veteran Ken Shamrock. Instead, a late injury replacement, Seth Petruzelli, was put into the cage. Petruzelli alleged in a later radio interview that Elite XC promoters told him he'd earn extra money by fighting a stand-up style that favored Slice's strength as a street fighter. A Florida commission is now investigating that claim.

Meanwhile, instead of gaining an investment by Showtime Networks that ProElite officials had said was vital for its survival, Showtime sent ProElite a default notice for $6.3 million last week, according to an SEC filing. "ProElite officials have advised us that they will not be able to put on the EliteXC event scheduled for exhibition on Showtime on Nov. 8," Showtime spokesman Chris DiBlasio said in a statement. "In view of Showtime's leadership role in sports programming, including boxing and mixed martial arts, we intend to explore other opportunities."

Thompson railed at what he called a cycle of wasted money by ProElite officials. Pro Elite would over-staff its fight cards with employees, bringing in "35 people who were running around, quite comically" at shows, he said. "It was mind boggling."

Earlier this year, in San Jose, a Pro Elite card generated a live gate of $1.2 million. Thompson, with 15 years of fight-promotion experience, said he advised ProElite officials to bring only a few employees north to maximize profits. Instead, he said, 23 employees worked the event.

A few Elite XC fighters, including champion Jake Shields, Robbie Lawler and Nick Diaz, may land at the top MMA organization, Ultimate Fighting Championship.

But Elite XC stars Slice and female fighter Gina Carano probably will have to look for fights elsewhere.

UFC President Dana White was not available for comment. But White's spokeswoman said he has previously insisted he wasn't interested in adding Slice to his stable of fighters because he didn't want to diminish the sport as "a freak show."

Carano's publicist did not return messages left for her, but the unbeaten female fighter, who has also performed as "Crush" on NBC's "American Gladiators," appears headed for a second-tier organization if she continues in MMA.

UFC's White has said that there isn't enough of a talent pool to start a women's fight league.

From day one of Elite XC's existence, White predicted a doomed effort.

"No one in that business has a clue how to do MMA," he said in December 2006. "These guys don't know the difference between MMA and thumb wrestling."

Taken from: http://www.latimes.com/sports/printedition/la-sp-mma22-2008oct22,0,2976847.story