Power Balance Pavilion in Natomas may be getting more bad news.
The NBA lockout is dragging on with no end in sight, and now there are reports that after the settlement of recent lawsuits against Power Balance, the company is filing for Chapter 11 Bankruptcy protection.
The media firm representing Power Balance confirms to FOX40 the Orange County business is voluntarily filing for bankruptcy protection while it restructures and deals with the fallout of recent lawsuits.
TMZ is reporting from sources with knowledge of the situation Power Balance reached a settlement deal with the defendants for more than $57 million. However, the statement obtained by FOX40 says the settlement is much lower. No word on how much that would mean for each defendant.
Power Balance makes charms and bracelets which they claim optimizes a person’s natural energy flow. Sports stars like Drew Brees and Lamar Odom wear the bracelets, which cost around $30.
The company's reputation took a hit recently after a ruling in Australia by the country's Competition and Consumer Commission. Power Balance's Australian manufacturer's statement read in part: "We admit that there is no credible scientific evidence that supports our claims and therefore we engaged in misleading conduct in breach of s52 of the Trade Practices Act 1974."
More recently, Power Balance faced a class-action lawsuit in January which has been recently settled.
Power Balance says they stand by their product, and say independent distributors, like those in Australia, and others using the brand illegally are making claims unsupported by the company, making them a target for lawsuits.
However, “the legal actions are coming at a high cost to the organization leaving the company no other option” than to file for bankruptcy protection.
While Power Balance is operating under Chapter 11 protection, they will still be in business, honoring warranties and their money-back guarantee.
Power Balance bought the naming rights to the Arena in Natomas earlier this year after the contract with ARCO was not renewed.
In a statement released Monday, the Sacramento Kings organization says they were aware of Power Balance’s decision to file for bankruptcy and the company has “been good partners since day one”.
Anticipating worries from the community, the statement continues: “They (Power Balance) have assured us of their commitment to the Sacramento Kings and the surrounding community and we expect to continue our productive partnership through this process and into the future.”