Last Friday the voluntary bankruptcy petition followed and involuntary petition that was filed on January 3. The petition was filed by Russell Pike, a former Xyience CEO, and several other individuals. The involuntary petition remains pending.
The total reported assets equal $5.3 million and liabilities equals $42.3 million. The Chapter 11 bankruptcy filing will assist Xyience in dealing with their creditors while the company restructures. The president expects the transaction to finish favorably.
The bankruptcy was necessary because they were unable to raise $7.5 million from shareholders.
The UFC is the current “heavyweight” in the mixed martial arts arena. Men between the ages of 18 to 34 enjoy the Ultimate Fighting Championship almost as much as the NFL.
The owners of Stations Casinos, Lorenzo and Frank Fertitta, also founded the UFC organization. According to the bankruptcy papers they have $5.3 million in secured and $12.5 million in unsecured claims against the beverage distributor.
In 2007, Xyience signed a $15 million sponsorship agreement with the fight league.
The bankruptcy became necessary when the company was unable to raise $7.5 million more from shareholders for the expansion of the growing company. Xyience had financial problems because it spent large sums of money on promotions and advertising without proper drink distribution.
In 2006, within two years of the company being founded, the sales grew to $20.4 million, from $109,000 in its first year. Source: Review Journal
Xyience Las Vegas energy drink distributor files for Chapter 11 bankruptcy.