WESTON, Fla. — Vital Pharmaceuticals Inc. (VPX), the maker of Bang energy drinks, filed for protection on Oct. 10 under Chapter 11 of the Bankruptcy Code in the Southern District of Florida, the company said. Vital Pharmaceuticals, which does business as VPX Sports, said all business operations will continue.
The announcement comes after a California jury ruled Sept. 29 that Bang must pay Monster Energy $293 million in damages for falsely advertising the “super creatine” ingredient of Bang Energy. The case, which lasted a month, revolved around claims of false advertising and trade secrets against the Weston, Fla.-based company and CEO Jack Owoc.
The nine-person jury found that “Bang Energy and its CEO Jack Owoc acted willfully and deliberately in violating the federal Lanham Act by falsely advertising the health benefits of Bang. That decision puts both Bang and Owoc on the hook for possible enhanced damages, which could triple the award,” the USA Herald reported.
In its bankruptcy-protection announcement, Bang said all business operations will continue, “with improved product delivery and service to retailers through VPX/Bang Energy’s newly constituted legacy distribution network consisting of more than 269 best-in-class distributors.”
“VPX’s Chapter 11 efforts are being supported by $100 million of additional financing from VPX’s esteemed syndicate lenders to help ensure operations continue uninterrupted during the restructuring process,” the company said.
“We are excited about our future, and particularly the new distribution system that we have spent the better part of this year assembling,” said Owoc concerning the bankruptcy filing. “Utilizing our new state-of- the-art decentralized direct-store distribution (DSD) will allow Bang Energy to get back to our pre-Pepsi meteoric annual success of several hundred percent year over year growth. We are coming like a freight train and cannot be stopped.”
In another case earlier this year involving the two energy-drink makers, an arbitrator hit Bang Energy with a $175 million penalty in a trademark lawsuit. The beverage maker was ordered to stop using the “Bang” name in 12 states. Monster attorney John Hueston said the award “recognizes that Bang has long competed unfairly in the beverage marketplace,” according to a Reuters report.
Bang said its bankruptcy-protection filing is a “restorative action to help the company recover from recent challenges, including multiple lawsuits that impacted the company’s short-term outlook and the cost impact of reconstituting the company’s national distribution network that resulted in a summer revenue gap.”
VPX said it intends to use the Chapter 11 process to “recapitalize and emerge from bankruptcy well-positioned to continue its rapid growth in the beverage market.”
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