In a story we posted online Dec. 18, 2017, and in our January issue of Direct Selling News, we incorrectly reported that Stemtech International, a global seller of nutritional products based in Pembroke Pines, Florida, had filed a motion with the U.S. Bankruptcy Court to convert its Chapter 11 bankruptcy status to Chapter 7.
It was the Unsecured Creditor’s Committee Counsel (Berger Singerman of Florida) that filed the motion, not Stemtech. This is the second time that Berger Singerman has filed such a motion, being denied by the court on the first filing several months ago. Stemtech “opposes any efforts to convert its Chapter 11 proceeding to Chapter 7” and is not planning to close its business, according attorney Michael D. Seese, speaking on behalf of the company.
On Feb. 2, 2017, Stemtech submitted a Chapter 11 filing in the U.S. Bankruptcy Court in Fort Lauderdale, Florida. This followed several months of costly litigation, including a copyright infringement lawsuit in which a 2013 jury verdict awarded stem cell photographer Andrew Paul Leonard $1.6 million as well as a lawsuit against Cerule, a supplier of raw materials for Stemtech. At the time of the filing, Stemtech listed $5.2 million in unsecured debt, secured debt of $3.4 million to the company’s primary lender, Opus Bank, and assets valued at $7.5 million.
An evidentiary hearing will be held Jan. 11, at the U.S. Courthouse in Fort Lauderdale for the new motion filed by the Creditor’s Committee Counsel, as well as its motion to alternatively appoint a Chapter 11 Trustee.
Stemtech was founded in San Clemente, California, in 2005 by Ray Carter, Howard Newman and Christian Drapeau. As pioneers of a new category of dietary supplement called stem cell nutrition, the company launched with a single product, StemEnhance, which was created to enhance the body’s production of adult stem cells. Stemtech relocated its headquarters to Florida in 2014. In 2016, the company reported earnings of $43 million, down from the previous year total of $52 million.
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