A distressed vodka brand has now filed for a massive Chapter 11 bankruptcy after facing judgement liens from National Football Leagues.
The popular vodka distiller Never Forget Brands, which manufactures GameDay Vodka and Spiked canned vodka cocktails, on July 10 filed for Chapter 11 bankruptcy.
Never Forget Brands’ GameDay in 2022 had become the official vodka of 14 NFL and NCAA teams after operating for only two years.
In June 2022, the company launched its GameDay Spiked vodka cocktails with three flavors: fruit punch flavored The Goat, lemon-lime flavored Cleat Chaser and strawberry lemonade flavored Cinderella Story.
This bankruptcy comes after Never Forget Brands faced judgment liens from the National Football League’s Buffalo Bills, owed $560,000, and New England Patriots affiliate Kraft Sports and Entertainment, owed $450,000.
The debtor, which had filed its petition in the U.S. Bankruptcy Court for the District of South Carolina, also owes unsecured claims to other NFL teams, such as the Denver Bronco’s affiliate Stadium Management Co. ($500,000,) Baltimore Ravens ($150,000,) New Orleans Saints ($150,000) and Indianapolis Colts ($110,000.)
Never Forget Brands also faces a judgment lien for $377,678 owed to Revel XP, a college hospitality, tailgating and ticket package provider.
The Isle of Palms, S.C., debtor listed $14.8 million in total assets and $13.7 million in total liabilities in its petition.
The debtor’s largest unsecured creditors include glass bottle manufacturer Pavisa USA, owed $2.1 million; collegiate sports marketing company Learfield Communications, owed $2.1 million; and Acceleration Group, a specialty lender for the craft cocktail industry, owed over $1 million, reports The Street.
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An essential company now files a surprising bankruptcy after miscalculating demand for its inventory after the Covid-19 pandemic.
Supply Source Enterprises, a leading provider of branded and private label cleaning products and personal protective equipment, on May 21 filed for Chapter 11 protection to seek a sale of its assets.
Supply Source brands include The Safety Zone and Impact Products.
The Guilford, Connecticut debtor listed $50 million to $100 million in assets in its petition and $180 million in funded debt, which includes $80 million owed on a term loan credit facility, $60 million owed on an asset-based loan, and about $40 million in unsecured debt.
Before the Covid-19 pandemic, which generated huge demand for cleaning supplies and personal protective equipment in 2020, Supply Source had been consistently profitable with stable single-digit growth, according to a declaration from the debtor’s Chief Restructuring Officer Thomas Studebaker.
Once the pandemic hit in 2020, the debtor had substantial growth due to high demand for safety, hygiene and sanitation products
The debtor reported adjusted Ebitda of $93 million in 2020 which was nearly a 300% increase over the previous year.
However, the company’s financial performance deteriorated in subsequent years.
Based on the unprecedented demand in 2020, the company commissioned an industry study in early 2021 that concluded that the Covid-19 pandemic would fundamentally change the cleaning supplies and protective equipment industry and market for its products.
The study also estimated that the company’s Covid-related growth would likely be sustained through 2024.
In contemplation of continued customer demand at elevated prices, based on the study’s data, the debtor increased purchases of inventory even though the costs were higher due to supply chain constraints during the pandemic.
Despite the study’s assurance that growth would be sustained for years, the pandemic’s positive effect on the market faded by the end of 2021 and demand for PPE decreased to normal rates, reports TheStreet.
The reduction in demand led to large amounts of excess inventory that the company could not sell in the same quantities and prices.
The excess inventory forced the debtor to secure additional storage space, which increased storage costs.
These factors tightened the company’s liquidity and led to a decline in annual revenue in 2023 by 26% from 2022, resulting in a negative 2023 Ebitda of $13 million.
The debtor’s liquidity issues led to it being overdrawn on its asset-based loan facility by $30 million.
The ABL lender in February 2024 swept the debtor’s bank accounts, further impacting the company’s financial distress.
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Also Read: This Massive Mall Retailer Is Now Closing In California
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