Vital Pharmaceuticals, the parent company of popular energy drink maker Bang Energy, is set to go to auction through U.S. Bankruptcy Court. The Florida-based company filed for Chapter 11 reorganization in October 2022 with liabilities totaling over $1.7 billion. The company stated that litigation with competitor Monster Energy and a flawed distribution agreement with PepsiCo were the reasons for the bankruptcy.
VPX has until March 24 to select a stalking-horse bidder, which will set the initial bid at the auction and be owed a breakup fee if another party wins the auction. VPX has been marketing itself to potential buyers through the investment bank Rothschild & Co. The court auction is set to take place on April 27.
The company’s case summary shows that it had a year-to-date revenue of $442 million through August 2022, compared to $728.3 million for the entirety of 2021. John “Jack” Owoc was listed as the company’s CEO and sole shareholder. The company had 1,103 employees and $581 million in assets at the time of filing.
In January 2022, VPX lost a trademark infringement claim to Monster Energy and its affiliate, Orange Bang, and was ordered to pay $214.8 million. VPX appealed to the 8th U.S. Circuit Court of Appeals, but the court upheld the decision. Another case saw Monster Energy win a $292.9 million jury verdict against VPX and Owoc in September 2022 over false advertising, trade secret misappropriation, violation of the federal Computer Fraud and Abuse Act, and interference with contracts for retail shelf space. VPX and Owoc have appealed.
In response to these legal battles, VPX filed a lawsuit in February 2022 against Orange Bang and Monster Energy, asking the court to ensure that whoever buys Bang Energy will remain subject to an arbitration award between VPX and Monster Energy. The company is allowed to continue using the Bang Energy trademarks as long as it pays Monster Energy 5% of net sales. VPX hopes that whoever buys the company can continue the arrangement without losing access to the valuable trademarks.
