StemTech files for Chapter 11 bankruptcy
Stemtech International was founded in 2005 by Christian Drapeau and Ray Carter. The company is currently based out of Florida and operates in the nutrition MLM niche.
BehindMLM reviewed StemTech in 2012 and found the company had a strong focus on autoship affiliate recruitment.
Over the last eight months Alexa traffic estimates for the StemTech website indicate a consistent month to month decline in business.
In 2016 StemTech’s gross revenue was $43.5 million, down from $52.5 million in 2015.
On February 2nd, 2017, StemTech filed for Chapter 11 bankruptcy.
In their Chapter 11 filing, StemTech cite 1 to 49 creditors and assets of between one and ten million.
The amount StemTech currently owes its creditors is in the vicinity of $5 million dollars.
The twenty largest unsecured amounts owed to creditors are as follows:
- Andrew Paul Leonard (amount disputed) – $1.6 million
- Wilhelm Keller (loan) – $772,000
- Cerule LLC (raw materials supplier, amount disputed) – $685,838
- Marinova PTY LTD (raw materials supplier, amount disputed) – $554,000
- Nixon Peabody (legal services) – $163,183
- Chelsea Investments (rent) – $151,450
- Hollins & Schechter (legal services) – $150,605
- Federal Express (shipping) – $148,537
- American Express (credit card fees) – $135,348
- Andrew Goodwin (loan) – $100,000
- Hutcheson Bowers (legal services) – $84,851
- Berkowitz Pollack (accounting services) – $94,407
- Energy Tools International (inventory) – $90,173
- United Data Technologies (IT consulting) – $58,690
- Lozeau Drury (legal services) – $58,000
- Fusion Packaging (raw material supplier) – $38,208
- Environmental Research Center (settlement) – $36,792
- AIDP Inc. (raw materials supplier) – $32,440
- Broad and Cassel (legal services) – $29,973
- California EPA (settlement) – $21,000
Reasons cited for StemTech’s bankruptcy are:
- a 2008 lawsuit filed by Andrew Leonard for $1.6 million (StemTech lost their appeal last year)
(Andrew Leonard) has vigorously pursued collection efforts.
These efforts have included an attempted levy against treasury stock and, more recently, the Judgment Creditor sought the appointment of a receiver for purposes of liquidating the patents and for an assignment of the equity interests in certain subsidiaries.
- Cerule’s 2016 lawsuit for alleged non-payment of products supplied
The (Cerule) litigation has been costly and depleted cash which would otherwise be used for day-to-day business operations.
These costs, coupled with losses stemming primarily from foreign currency adjustments, have resulted in Debtor defaulting on the Converted Line and Term Loan, both of which are scheduled to mature on December 1, 2016.
- failure to make lease payments
On January 30, 2017, the Debtor’s landlord served a three (3) notice of default and opportunity to cure relating to the Debtor’s corporate headquarters lease.
As I write this there’s no mention of StemTech’s bankruptcy on their website or social media profiles.
“Company News” on the StemTech website returned a message stating the headline feed was unavailable.
The last post on the StemTech Facebook page promotes their DermaStem Lift product and was made on February 2nd.
IMHO, Stemtech had always been a joke. They claim their found some algae that can make the human body make more stem cells that free floats in the blood, and somehow that leads to better overall health.
There are so many problems with those generalities that they don’t really lead to each other. It’s always been a high concept health fad driving their sales (Oh look, stem cells!) and it’s basically a one trick pony.
It’s sad really. I got involved with Drapeau’s former company Cell Tech (now New Earth) way back in the early 90’s. I actually liked the way the algae products enhanced my mood and energy levels.
I always wondered about the effectiveness of the Stem Enhance product.
Stop this madness. This company just filed Chapter 11 Reorganization like thousands of other companies do each year.
The purpose is to reorganize the debt of the parent company. The operating subsidiaries aren’t affected at all and the global business isn’t affected at all.
By madness you mean reporting the facts?
Right, I’m sure StemTech filing for bankruptcy in the US and being sued by product suppliers won’t have any effect on the global business :rolleyes:
Talk about fake news, another industry rag that should be sued for libel.
The “suppliers” referenced by “Oz” are clearly no longer suppliers and the chapter 11 filing restructures and discharges the debt (ie. no lawsuits).
The legitimate quality suppliers the company wishes to retain will continue to partner with Stemtech. It will effect the global business for sure, in a POSITIVE way, so rent a clue please.
You are aware anything in a green box is quoted directly from StemTech’s own Chapter 11 bankruptcy filing right?
The bullet listing of creditors is also taken from the filing.
Has anyone investigated whether StemTech products turn brains to jelly?
What is your point Oz? (Ozedit: What was yours? Offtopic derail attempts removed.)
Looks like Oz the editor doesn’t allow intelligent rebuttals to his nonsense. Surprise.
Crapping on about slander when StemTech’s own Chapter 11 filing is quoted constitutes “intelligent rebuttal”?
Confirmed: StemTech products turn your brain to jelly.
Gotta say, the reaction from StemTech affiliates to the bankruptcy news is pretty hostile. Perhaps it’s worse than the Chapter 11 filing is letting on.
Standard denial response. Instead of blame the Stemtech leadership for ruining their business, they rather shoot the messenger, and try to deny factual details. Hahaha. Typical head in sand response.
apparently another scam recruitment scheme taking another hit when the truth is exposed.
Hi Mikey – when then does the BANKRUPTCY filing (yes there is no such thing as Chapter 11 of the reorganization code) say, in the letter from Stemtech’s counsel, that other subs may also Chapter 11?
Why too are only 27 or 47 subs “operational”. Why do you have $8.3m in debt? Why are sales tanking? When last did you make a profit? You do know all this is public domain right?
Roughly 50% of all companies that file Chapter 11 (reorganization) are converted to Chapter 7 (liquidation.)
You already have one creditor attempting to access the equity in subsidiaries to satisfy his judgment Then of course, cash flow or assets will be required just to pay a trustee and various attorney fees which often run to 50% + of the bankruptcy estate’s assets.
I wish you well.
‘StemTech is headquartered in PemBROKE Pines.’
Baahaahahahaahahaa!