VPX Sports: Monster and others want official representation in case

By Sarah Lizee

Olympia, Wash., Nov. 28 – Vital Pharmaceuticals, Inc. (VPX Sports) creditor Monster Energy Co. and several others are asking the U.S. Bankruptcy Court for the Southern District of Florida to appoint an official committee of creditors holding non-trade claims, according to a motion filed Sunday.

Orange Bang Inc., American Bottling Co., Inc., Sony Music Entertainment and UMG Recordings, Inc. joined Monster in seeking the official representation.

“The debtors filed these cases in the immediate aftermath of another major defeat in the endless litigation engendered by the reckless business practices and intentional misconduct of its founder, chief executive officer, and sole shareholder, Jack Owoc,” the group said in their motion.

“By their own count, the debtors are party to 63 disputes in active or threatened litigation, and six of the seven largest scheduled unsecured claims in these cases are held by non-trade claimants, which comprise by far the largest members of the debtors’ unsecured creditor constituency.”

The six largest non-trade claims by themselves total at least $853 million in filed claims, which is about 12 times the total amount of trade claims in VPX’s cases.

Monster Energy holds the largest of the debtors’ litigation liabilities, with a filed claim of over $389.74 million, based on a judgment and a jury verdict. The same judgment also supports Orange Bang’s scheduled $87 million claim.

Others are based on settlement agreements, such as Pepsico’s claim of $115 million and Doehler USA’s claim of $22 million.

American Bottling has a scheduled claim of $17.68 million and filed a proof of claim for at least $225.1 million. Sony’s claim of at least $35.5 million and UMG’s claim of at least $22.15 million are based on copyright infringement.

“Suffice to say, these cases are driven by the debtors’ inability to address non-trade liabilities, not by an inability to service trade liabilities,” the group said.

“It will not be possible to confirm a plan of reorganization without the consent of the moving parties.”

The U.S. trustee appointed a seven-member official committee of unsecured creditors that has only one of the top seven creditors, the group noted. It is composed exclusively of trade creditors that hold total claims of $48 million, which is just over 5% of the six largest non-trade claims.

“That the claims held by those creditors are not representative of the claims against the debtors is therefore an understatement,” the group said.

“Their interests, in fact, will in all likelihood conflict with the interests of the non-trade creditors who hold the key to any consensual outcome in these cases.”

The Pembroke Pines, Fla.-based maker of Bang energy drinks and other products filed Chapter 11 bankruptcy on Oct. 10 under case number 22-17842.

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