Tori Belle Cosmetics files for Chapter 11 bankruptcy
Tori Belle Cosmetics’ parent company LashLiner has filed for bankruptcy.
As per an August 8th Chapter 11 filing in the Western District of Washington, LashLiner had $5.2 million in liabilities at the end of FY 2021.
I hadn’t heard of LashLiner or Tori Belle Cosmetics till a reader reached out earlier today.
LashLiner and Tori Belle operate in the cosmetics MLM niche. The companies were co-founded by Laura Hunter (CEO) and Bob Kitzberger (President).
Hunter and Kitzberger share a 50/50 equity stake in LashLiner.
This is direct from LashLiner’s website;
Laura Hunter invented magnetic eyeliner in February 2018, a game-changing innovation that makes it dramatically easier for people to apply and wear false eyelashes.
Hunter founded LashLiner Inc in 2018 to bring her patent-pending invention to market, alongside co-founder Bob Kitzberger, and in June 2019 launched Tori Belle Cosmetics.
As I understand it Tori Belle Cosmetics is a LashLiner subsidiary, through which the MLM side of the business operates.
Tori Belle is sold exclusively through tens of thousands of independent affiliates and influencers, across many channels including social media, online advertising, and brick-and-mortar venues.
A Comparative Balance Sheet filed on August 15th reveals the following liability breakdown, as of the end of FY 2021:
- $3.5 million in accounts payable
- $281,647 in credit card debt
- $1.44 million marked as “other current liability”
Worth also noting is $3.1 million in accounts receivable, and $5.4 million in held product inventory.
In 2020, LashLiner recorded $5.5 million in net income. In 2021 it recorded a $1.2 million dollar loss.
LashLiner’s sales took a pretty big hit, dropping from $59.6 million to $22 million. Shortcomings that are obvious in the numbers are
- the cost of goods sold dropping only 48%, while net sales of products dropped 64%
- payroll wages, taxes and benefits remaining at around $5 million year on year
- “other income and expenses” rising from $31,665 to $715,436
As part of their bankruptcy filing, LashLiner included a “six-month cash projection and budget”.
The filing details
- a projected increase in sales due to seasons and an “Aug/Sep major new product launch” of a “workout line” they’re calling TB Brave
- no change to free shipping policy due to move to a third-party logistics warehouse and
- implementing “remote work for remaining workers”
In a more immediate effort to keep the company together, on August 17th LashLiner filed an ex parte application to Pay Wages and Salaries and Payroll Taxes.
LashLiner argued that not paying its staff would “irreparably impair the Employees’ morale, dedication, confidence, and cooperation.”
At this early stage, the Debtor simply cannot risk the substantial damage to its business that would inevitably attend any decline in its Employees’ morale attributable to the Debtor’s failure to pay wages, salaries, and other similar items.
Absent an order granting the relief requested in this Motion, the Employees will suffer undue hardship and, in many instances, serious financial difficulties, as the amounts in question are needed to enable certain of the Employees to meet their own personal financial obligations.
The application was granted on August 19th.
Following LashLiner and by extension Tori Belle Cosmetics’ bankruptcy is a bit challenging as I’m not familiar with the company. I’ll do my best to keep track of any significant developments going forward.
I’m aware of two Tori Belle Cosmetics class-action lawsuits filed in August, the details of which I’ll cover in pending separate articles.
Update 20th August 2022 – Laura Hunter held an August 19th FaceBook live to address LashLiner’s bankruptcy.
This appears to have happened after bankruptcy proceedings were inadvertently leaked on Friday, following the employee payment issue detailed above.
Update 22nd August 2022 – Added some additional financial details from LashLiner’s bankruptcy filings.
Update #2 22nd August 2022 – BehindMLM has published articles on both filed Tori Belle class-action lawsuits.
The first class-action was filed on August 2nd in the Superior Court of Washington. The second class-action was filed on August 16th.
Both lawsuits pertain to Tori Belle’s $9 a month affiliate membership fee.
Update 26th August 2022 – This chart is from a Statement of Financial Affairs, filed on August 22nd;
Tori Belle’s gross revenue dropping from $50 million to $5 million (projected $10 million by the end of 2022), represents an 80% reduction over two years.
This isn’t to say the company is doomed but it does provide additional context to the bankruptcy filing.
Update 21st July 2023 – Tori Belle has filed for Chapter 11 bankruptcy.
The Chapter 11 bankruptcy of LashLiner (detailed in this article), Tori Belle’s parent company, is pending conversion to a Chapter 7 liquidation.
Update 12th August 2023 – On August 11th the court granted conversion of LashLiner’s Chapter 11 bankruptcy to a Chapter 7 liquidation.
An order with more information is pending.
Actually did she really invent it? She never had an issued patent . She claimed she was the worlds first however the United States patent and trademark office never identified her as an inventor of a new and original product which is why many similar products started hitting the shelves
These claims of being the inventor created a false sense of exclusivity for investors who wanted to participate and later discovered it was all appeared to be a case of false advertising
It’s really a shame when someone misleads to so many innocent people .
If you go back and look at the overly confident language and ownership of naming herself an inventor that was being used during the patent pending process it’s easy to see it may have really just been a lucrative charade.
She made a business off a patent pending she knew would never issue. Many of us could see it wouldn’t issue when we started researching it.
Not to mention some of the poor business practices . Firing investors and keeping their commissions and client lists, continuing to withdrawal 30 per month from associates after they canceled memberships.
I wonder if there is also lawsuits existing ?
I can’t really comment on the invention claim as I haven’t looked into it.
I imagine if Hunter didn’t invent it by now she’d have have received a C&D from the actual inventor? Also, while there are benefits, patenting an invention isn’t a requirement.
Now that I’m tracking LashLiner’s bankruptcy, if that pulls through without issue then I’ll add Tori Belle Cosmetics to the review list. That’ll give me an angle to look into the invention claim.
I also see Hunter has a fan club. Unless it specifically pertains to Tori Belle Cosmetics’ bankruptcy, this isn’t the place.
The patent was abandoned because others applied before her and the ingredients have been used since the beginning of time.
She built up trust on a pending patent and referred to herself as an inventor however it was not a new invention according to the United States patent and trademark office.
If I applied for a patent on a straw tomorrow it would sit at the ustpo for months or years.
During the time it was waiting to be reviewed which is what they did was they acted like the application was the actual patent.
Applying for a patent means absolutely nothing she used language like “the worlds first” and inventor without actual permission to be that because she wasn’t. This is concerning .
People sign up for mlm for exclusive opportunity.
Because she kept saying she was the inventor people made investments with a certain amount of safety thinking there wasn’t competition.
She even made comments about people copying her. However it was never new or an invention.
If you spend a little time on ustpo you will see what I am talking about.
The worlds First. Is it though?
kickstarter.com/projects/lashliner/worlds-first-magnetic-eyeliner-and-false-eyelash-s
Just Curious.
Another form of strip lashes used today is magnetic lashes. They were invented in 2014 by the founder of One Two Cosmetics, Katy Stoka.
Magnetic lash extensions are placed around the natural lashes to cling to each other. The clinging effect often creates a more voluminous look than their glue-on counterparts. Apr 21, 2021.
Im just confused read the language on their own website and check out the abandoned patent. (Ozedit: derails removed)
I get it, you’ve got an axe to grind. I can’t see how marketing claims are relevant to Tori Belle Cosmetics bankruptcy though.
If this was a normal review it’d be fair game to challenge the marketing, but it’s not.
Let me help put some perspective behind the patent claims. First, perhaps, if Laura Hunters patent claims were true and the patent went through, she wouldn’t be in the position of filing any form of bankruptcy.
This is relevant to the bankruptcy. An abandoned patent for WHATEVER REASON means the shelves at Walmart, Target, Ulta… and 1,000’s of other online brands stock her alleged “worlds first” magnetic liner.
Second, the fact the products were sold for so long (and still are) as “PATENT PENDING” becomes malicious and false at some point.
Article updated with Statement of Financial Affairs.
Actually it looks like they requested to change it from chapter 11 to chapter 7:
bkdata.com/business-bankruptcies/seattle-washington/08-08-2022/lashliner-inc-11273
Unless I’ve got my bankruptcies mixed up, a bank was pushing for Chapter 7. It hadn’t been resolved last time I checked the docket.
Living her best life spending that money!!! December 15th living it up in on a trip to Iceland … unreal!!
Minor update, the hearing for the motion to convert Ch11 to a Ch7 bankruptcy was held on the 16th.
Outcome was inconclusive:
Ch11 to Ch7 bankruptcy motion hearing was held on February 15th, continued to March 24th.
Tori Belle are still filing amended revisions of their fifth Amended Bankruptcy Plan. Latest revision was filed March 24th.
There was a hearing on March 24th but there’s nothing about the Ch11 to Ch7 motion on the docket. The minutes entry however does state:
Docket 184 is Tori Belle’s Fifth Amended Chapter 11 Plan. I *think* that means the bankruptcy is proceeding as a Chapter 11 as opposed to a Chapter 7 conversion.
I was one of those people that stopped selling their products and I kept getting monthly charges for the website. I wonder if I could piggy back in on the lawsuit originally filed.
It is very hard to compete selling magnetic lashes and magnetic eyeliner with the prices they want you to charge when you can go to the local pharmacy or grocery store and find several companies selling them for far cheaper than Tori Belle.
The bankruptcy? That’s not how bankruptcy filings work.
Generally speaking with the class-actions, if you’re covered under the established class(es) you’ll be contacted. This of course relies on your contact information supplied to Tori Belle being valid.
Just a follow up re. Chapter 7 conversion, the court has confirmed Tori Belle’s latest Chapter 11 bankruptcy plan on March 27th.
The motion to covert the case to a Chapter 7 was denied on March 28th.
I didn’t cover this in a separate article as there wasn’t much point unless the motion prevailed (bankruptcy proceedings are complicated enough as it is).
Hunter does have a patent on Magnetic Eyeliner, in Japan. She didn’t invent magnetic lashes. She invented magnetic eyeliner and mascara.
She owns Lashliner. Hence, the original kick starter.
Finally, Tori Belle did not file for bankruptcy, LashLiner did. They are different companies.
As per bankruptcy filings the companies operated one and the same. Prior to bankruptcy there was no distinction between the two from an operational standpoint.
Interesting rabbit hole… I dogsit occasionally for my roommate’s cousin and she was just at the Tori Belle conference in Reno last week.
I had no idea what the company was and did a search, which led me here.
I wonder what the mood is behind the scenes with bankruptcy and being sued by banks for unpaid loans – they seemed to be having a lovely time.
Everything screams it’s kind of a pyramid scheme. A shame, she’s really great and I think doing pretty well for herself in TB (for the moment).
As a former ToriBelle Consultant I can say that they paid for all this inventory to be made in China when the pandemic hit the world shutting all trades off that hurt this business horribly.
I attending the online 1 year anniversary party when Hunter announced they “couldn’t get inventory to us (clients and or online customers) because of the pandemic but (she) was working to find other manufacturers here in the states willing to follow her own created formula to her 100% satisfaction.”
So all these sales rolled in for the new mascara (consultant pre-sales) that next month, January, that was used as profit but they couldn’t find anything quick enough and had to write it off as a “Profit Loss” and take the hit.
Article updated to note LashLiner’s Chapter 11 bankruptcy is now a Chapter 7 liquidation.
There’s an order coming from the court. If it’s substantial I’ll publish a separate article.