The iGalen, Valentus & ATM Metabolics Emulin dispute
I first came across the legal dispute regarding ATM Metabolics’ Emulin supplement in our recently published iGalen review.
A reader got in contact with some additional information, prompting me to further research the dispute.
Here’s what I found.
ATM Metabolics claims to provide “real solutions for metabolic disorders”. The company is based out of Florida and headed up by CEO Joseph Ahrens.
ATM Metabolics are the supplier of Emulin, which up until recently was a flagship product of iGalen.
From around mid 2018, ATM Metabolics began also supplying Valentus with Emulin.
Owing to an exclusivity clause in their contract, iGalen filed suit against ATM Metabolics in November 2018.
iGalen’s lawsuit was filed in the Superior Court of California for the County of San Diego. The case isn’t tracked on Pacer and I wasn’t able to track down a copy of the complaint elsewhere.
As per a “Corporate Legal Announcement” dated May 21st however, iGalen CEO Rajen Manicka confirms the lawsuit is a contract dispute.
Towards the end of the announcement, Manicka reveals iGalen sent Valentus a cease and desist notice on May 20th.
As per the notice, Valentus has 72 hours to stop selling Emulin.
As I write this there’s no mention of Emulin on the product section of Valentus’ website.
There is however a Prevail 24/7 Carb Burner product advertised. Joseph Ahrens and ATM Metabolics are heavily featured in Valentus’ 24/7 Carb Burner marketing.
Although I can’t say for sure, I believe Prevail 24/7 Carb Burner is just another name for Emulin.
If Valentus failed to comply with their cease and desist, iGalen threatened to add Valentus as a defendant in their lawsuit.
Whether or not that happened in unclear. Ditto the overall status of iGalen’s ongoing case.
On April 15th ATM Metabolics filed its own lawsuit against iGalen, parent company Holista Colltech Limited, Rajen Manicka and Kosta Gara (iGalen’s Chief Executive Advisor).
Note that ATM Metabolics’ lawsuit makes a distinction between Holista Colltech and iGalen.
For the sake of simplicity I’m just going to refer to Holista Colltech as iGalen going forward.
If you want to read more on the relationship between iGalen and Holista Colltech, check out of recently published iGalen review.
As per ATM Metabolics lawsuit, a five-year contract between iGalen and ATM Metabolics was entered into on January 9th, 2017.
This Agreement granted iGalen, in part, the exclusive right to market, promote, and sell Emulin in the Multi-Level-Marketing space throughout the world, in exchange, in pertinent part, for royalty payments.
ATM Metabolics alleges that iGalen has violated the contract, by failing
to meet its contractual obligations since the inception of the Agreement, and has strung ATM along for more than one year with promises (that would eventually prove to be false) that Holista’s poor performance would improve.
ATM Metabolics claims iGalen’s sales “have been well-below expectations”, and that the company has on multiple occasions failed to provide ATM Metabolics with monthly sales reports.
Over time, it became clear that Holista did not have the proper systems in place to effectively fulfill its contractual obligations.
Indeed, ATM was often told by some of Holista’s distributors (i.e., those working under iGalen) that Holista’s back-office, signup procedures and software were cumbersome and ineffective, which resulted in lost sales.
In fact, distributors complained to ATM that orders of Emulin were oftentimes severely delayed, or never arrived at all.
This caused the distributors to lose customers, and in the process, damaged the reputations of ATM, Dr. Ahrens, and many of the distributors working under iGalen, all of which ultimately served to tarnish the Emulin brand.
Nevertheless, Holista’s CEO, Rajen, consistently told ATM not to worry because, as he explained, Holista was building its distributor team (i.e., through iGalen) and that everything would beneficially “blow up” in short order.
In reliance upon these representations, ATM continued to support Holista. Holista’s performance, however,
failed to improve.
Through all of this iGalen’s top distributors Dori O’Neill and Jana Jorgenson.
ATM Metabolics credits O’Neill, Jorgenson and their downline with generating “approximately 60%-70% of Holista/iGalen’s sales volume”.
As claimed by ATM Metabolics;
Over time, O’Neill and Jorgenson (Holista/iGalen’s top distributors) grew frustrated with Holista/iGalen’s performance and inability to competently support its distributors and their customers, and expressed these concerns to ATM and Dr. Ahrens from time-to-time.
ATM Metabolics states that these occasional complaints saw iGalen terminate O’Neill and Jorgenson in September 2018.
This in turn resulted in “80% of iGalen’s sales force quitting”.
O’Neil and Jorgenson have since gone to become Valentus distributors.
As per the terms of their contract, iGalen is required to pay ATM Metabolics $15,000 a month plus royalties on each unit of Emulin sold.
ATM Metabolics claims that since the September 2018 terminations, iGalen has “failed to pay (it any) monthly royalty fees”.
ATM Metabolics also alleges violation of the contract relating to iGalen’s ability to provide distributor and customer support.
A termination clause in their contract allows either ATM Metabolics or iGalen to void the contract, should there be
any material change in the management, ownership, control, sales personnel, sales and marketing capability, or financial condition of iGalen that prevents iGalen from fulfilling its obligations hereunder.
Citing an “80% reduction in iGalen’s sales force”, ATM Metabolics points to O’Neill’s and Jorgenson’s terminations as a “material change” in iGalen’s sales personnel, sales and marketing capability.
On January 8th, 2019, ATM Metabolics terminated their contract with iGalen via written notice.
iGalen rejected the notice, on the basis losing 80% of their distributors didn’t constitute a material change to their marketing capability and financial condition.
As per the contract, in April ATM Metabolics also sought to buy back iGalen’s remaining Emulin inventory.
iGalen refused, claiming that because the contract termination was “improper”, ATM Metabolics had “waived its right to buy back iGalen’s inventory.
When asked to provide specifics as to their supposed waiver, iGalen’s attorney responded;
I will respectfully decline to elaborate on my client’s position on this issue.
Later that same month iGalen launched Uncarb as an Emulin replacement in its product lineup.
ATM Metabolics are seeking an injunction against iGalen, prohibiting them from further marketing or selling Emulin.
As per ATM Metabolics’ lawsuit case docket, an amended complaint was filed on April 15th.
iGalen (as Holista Colltech Limited) filed for an extension of time to answer the ATM Metabolics’ complaint on April 26th.
The motion was granted the same day, giving iGalen until May 17th to file an answer.
As of today, May 30th, no answer has been filed.
As previously stated I can’t track iGalen’s lawsuit. I’ve added ATM Metabolics lawsuit to our list of tracked cases though, so stay tuned for updates as we receive them.
Update 20th February 2020 – A motion to dismiss was filed on December 16th, bringing ATM Metabolics’ lawsuit to a close via confidential settlement.