Muscletech files for bankruptcy

[Norton]

They say that there are about 60-80 lawsuits involving Muscletech and Hydroxycut's that contain ephedra. There are also class action lawsuits from states about these issues.  They is no way that Muscletech can even afford to fight these, let alone pay any judgement, regardless of what it was. With AST Sports Science declaring bankruptcy in their Dymetadrene Extreme case, and that care going to a jury and a jury awarding the plantiff $6 million dollars, it can be reasonably assumed that Muscletech will lose a few of these cases, regardless of the proof that ephedra is the cause of anything, but just by jury sympathy. Add the the fact that each case going to a jury trail, and going through the motions, and depositions can cost upwards of $500,000 per case just in fees, and you understand what is going on.

Two year back, Iovate, or rather eight different Iovates, allegedly, were created for various aspects of the supplement company. Muscletech has no assetts at all, most likely, and the name was probably already leased to Iovate. By declaring bankruptcy, the most they will get is whatever the name is being leased for, which is probably a minimum amount (let's say $500,000 a year), which covers nothing in the scope of things.

Iovate, which owns Muscletech's name, will not be affected by this at all.

Until the laws be changed that prevent something like this, and it happens all of the time, to many companies, oh well.

AST Sports Science is running quite nicely, after avoiding all of the lawsuits and other debts. Not bad for the owners of the companies...

That is a good safety net and a must in todays sue for anything mentality. However, there is still a period of time (2 to 5 years) the courts go back for what is called fraudulent conveyance. All monies transfered and payed to insiders must be returned.

It they are set up right as you have described it won't be as painfull and will persuade others not to sue, but a company of there size, total cost of bankruptcy will be in the 8 figures with ease, if they want to ride it out.

They could pull the plug and take the money and run. I'm sure they are considering this option.

[Norton]

MuscleTech Research and Development Inc.

Debtor:   MuscleTech Research and Development Inc.    
5100 Spectrum Way, Mississauga, Ontario L4WS2, Canada
 
About:    The Debtor is a privately held Canadian company. The Debtor-affiliates can be divided into: a. Formulation Companies that own or owned certain product formulations, trade secrets, know-how and patents associated with some health supplement, weight-loss and sports nutrition products formerly sold by MDI; and b. Trademark Companies that own or owned the trademarks associated with some products formerly sold by MDI and some other miscellaneous trademarks, some of which are Canadian, U.S. or foreign trademarks.
 
Petitioner:    RSM Richter Inc.
Canadian Court-Appointed Monitor and Foreign Representative

Petition Date:    2006-01-18
 
Case number:     06-10092
 
Bankruptcy Court:    Southern District of New York Bankruptcy Court

 
U.S. Judge:    James M. Peck
 
Petitioners' Counsel:    Allen & Overy LLP
 
Tel:
Fax:

U.S. Trustee:    
 


Related Debtors:

1619005 Ontario Ltd. - 06-10093
ACE Formulations Ltd. - 06-10094
ACE US Trademark Ltd. - 06-10096
Cell Formulations Ltd. - 06-10097
GENERAL Formulations Ltd. - 06-10098
HC Canadian Trademark Ltd. - 06-10100
Comida Inc. d/b/a Ideya - 06-10101
HC Foreign Trademark Ltd. - 06-10102
HC Trademark Holdings Ltd. - 06-10104
HC US Trademark Ltd. - 06-10105
MESO Formulations Ltd. - 06-10106
MISC Formulations Ltd. - 06-10107
MT Canadian Supplement Trademark Ltd. - 06-10108
MT Foreign Supplement Trademark Ltd. - 06-10109
NITRO Formulations Ltd. - 06-10110

Total Assets:    to 10.00 Million
Total Liabilities:    to 50.00 Million

Bar Date:    

List of Largest Creditors:    Entity    Nature Of Claim    Claim Amount

Important Documents:

Docket No.     Date Filed            Docket Text

001                  2006-01-18    CHAPTER 15 PETITION -- Form 1 -- filed by MuscleTech for recognition of Foreign Main Proceeding
001A                2006-01-18           CHAPTER 15 PETITION -- Pleading Petition -- filed by Muscle TEch
002                 2006-01-18    MOTION filed by Muscle Tech for Joint Administration of Cases
005                 2006-01-18    MEMORANDUM OF LAW supporting Chapter 15 Petition and Application for Order to Show Cause with Temporary Restraining Order and Preliminary Injunction enjoining the Commencement or Continuation of Product Liability Actions against Foreign Applicants and Others filed Muscle Tech

[Norton]

Here's the whole MuscleTech bankrupcy story:

http://rsmrichter.com/downloads/pdf/insolvency_files/FileID67/Report_of_Proposed_Monitor_dd_Jan_13_06.pdf

[LurkerNoMore]

What does Burpmali say about his jeapordize contract.

[gammahydroxy]

Yeah, and so does this:

Debtor:   MuscleTech Research and Development Inc.5100 Spectrum Way, Mississauga, Ontario L4WS2, Canada
Petition Date: 2006-01-18
Case number:06-10092
Bankruptcy Court:   Southern District of New York Bankruptcy Court
U.S. Judge:   James M. Peck
http://www.chapter15.com/bin/chapter15_view_company?cid=1137663608

This one works   http://www.chapter15.com/bin/chapter15_view_company?cid=1137663608

[Tre]

Total Assets:    to 10.00 Million
Total Liabilities:    to 50.00 Million

You called it.

Sorry I doubted ya, mate. 

Does this mean no free t-shirts at the Arnold this year??

[240 is Back]

Total Assets:    to 10.00 Million
Total Liabilities:    to 50.00 Million

Wow... this just made my day start ten times better.


Imagine what that ratio would be if they charged REASONABLE prices?

[FlexCabana]

are the people who started this rumor the same ones who said chris cormier was dead???

[Norton]

are the people who started this rumor the same ones who said chris cormier was dead???

Not a rumor. Follow the links.

[elite_lifter]

WRONG

[Busted]

They grossed 500 million last year. and Paid out like 5% to athletes.  They are NOT bankrupt

[bigmikecox]

The word on the street is Muscletech has filed for bankruptcy.

"Word on the street"?  How fucking gay...

[suckmymuscle]

I dunno, mate.  Generally, a company this large doesn't get to the point of a bankruptcy filing without there having been some writing on the wall. 

  Really? Freddy&Fannie were infinitely larger than MuscleTech and they bankrupted without any signs of warning - otherwise it's clients would have taken their money before the companies went down the drain and there wouldn't be so many people now depending on the government to bail them out.

SUCKMYMUSCLE

[Pecs]

hydroycut is pretty popular with people who are not into bodybuilding, people who want to slim down... i was suprise when i know some of friends were taking them to lose weight.....

[MCWAY]

Maybe it is true.The newer products were maybe a way to create new revenue to keep their company in business.Have to wait & see I guess. I just know what's his name that posts here (McWay or McWhey or whatever it is)  & likes MT prods will be in sale heaven w/their products if it is true.

You rang?!!!

I'm happy anytime I can get MuscleTech products (or those of BSN, ON, Nature's Best, etc) cheap, such as the Nitro-Tech Hardcore bar I just finished eating. The Chocolate Crisp one ain't the most pallet-pleasing thing in the world (it leaves a horrible aftertaste). But, at $0.75, it's a bargain.

But, those are simply standard GNC markdowns. When I can get those 7-lb jugs of CELL-TECH for $20, as I was doing in 2005, that's when I get to reach "sales heaven".

[MCWAY]

Muscletech just recently, last year or so, changed their name to Iovate and switched the MuscleTech name to a product line as opposed to a company name. As for Bankruptcy....bullshit. Trust me, "the word on the street" is wrong.

It appears that Iovate is a giant company that bought the MuscleTech company. That might explain why Iovate has the other supplement companies (Six Star and Muscle Asylum). They also use the Hydroxycut name, for the version of the product you see advertised on TV. The name "MuscleTech" doesn't appear on those at all. And, Iovate also has some Hoodia fat-burner product and other thermogenic supplements, none of which have the MuscleTech label.

hydroycut is pretty popular with people who are not into bodybuilding, people who want to slim down... i was suprise when i know some of friends were taking them to lose weight.....

Yep. That's the one they show on TV without the MuscleTech name. Some small store still sell the version of Hydroxycut with the MuscleTech logo (the ephedra/ma-haung-free version). Hydroxycut Hardcore is also quite popular as well. At Vitamin Shoppe, while the clerks keep the other fat-burners on the shelves, they  keep the bottles of HH behind the counter or in the back, because people keep stealing them.