“Wrongful Takeover of the Company” by Linked Venture Credit Fund Alleged
LAS VEGAS, Feb. 13, 2026 /PRNewswire/ — Lights Out® Enterprises and CEO Shawne Merriman filed a lawsuit seeking a Temporary Restraining Order (TRO) to stop unauthorized governance and control actions taken by Applied Real Intelligence (A.R.I.) whose Managing Partner is Zack Ellison and a linked #venture credit fund (Case # A-26-937793-C). The Complaint, filed in Clark County Nevada District Court, alleges that A.R.I. attempted to assert control over Lights Out® Enterprises — including public claims of management authority — without completing a lawful foreclosure process or obtaining court approval. A.R.I. moved the suit to federal court.
The Complaint states that: “The Lender Takeover of the Company by Displacing Merriman as CEO, Sole Director and Stockholder Based on 3 Months of Interest Payments is Unconscionable.”
According to the Complaint, the defendant company and venture credit fund owned by Ellison (A.R.I. Senior Secured Growth Credit Fund, LP) allegedly tried to wrongfully take over Lights Out® Enterprises in order to “clear the path for equity conversion and dilution” by removing Merriman, amending the company’s certificate of incorporation and installing Ellison as the sole firm Director. The suit alleges that the defendants and General Managing Partner Ellison began “holding themselves out to employees and third parties as controlling management of the Company, directing employees to report to them and issuing public statements announcing a change in leadership.” These actions caused significant and irreparable harm and confusion among sponsors partners, employees, and others, as detailed in the Complaint.
The lawsuit stems from a disputed default over a loan venture credit fund A.R.I made to Lights Out® Enterprises which made continual efforts to repay the debt. The valuation of the company and its intellectual property vastly exceeds the amount of the alleged debt, as noted in the filing. It states, “The proxy and attorney-in-fact provisions in the Loan Agreement are security devices intended to protect collateral value, not grants of managerial authority or ownership rights.”
Shawne Merriman earned the nickname “Lights Out” during his long and legendary football career, which included being a valued player for the Buffalo Bills and San Diego Chargers. He subsequently built that name and reputation into the nationally recognized and trademarked brand “Lights Out®”. A key subset of that brand is Lights Out XF® a successful mixed martial arts (MMA) operation which has included over 29 events and 180 fights live-streamed.
In 2024, Lights Out XF® Inc. and A.R.I. entered into a Loan and Security Agreement. A.R.I. alleges that Lights Out® did not make timely interest payments from October-December 2025. However, after some back and forth communications, on January 2, 2026, A.R.I. notified Merriman and Lights Out® of a default. This action caused this filing to retain control of the enterprise. The action notes, “The loan agreement does not authorize Defendants to operate the Company, act as officers, displace management or appropriate governance absent lawful foreclosure or court supervision.”
Plaintiff seeks a TRO and preliminary injunction against A.R.I. and venture credit fund noting: “No privilege or justification for Lender’s conduct exists. Lender’s conduct was malicious and committed with reckless disregard to the rights of Plaintiff and Lights Out® .”
The suit requests damages as well as attorney fees. Plaintiff is represented by Ross Goodman, Goodman Law Group P.C. of Las Vegas Nevada.
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SOURCE Lights Out Enterprises
