Power Balance LLC Files for Bankruptcy, Keeps Producing
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Power Balance LLC Files for Bankruptcy, Keeps Producing

December 2, 2011

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Power Balance LLC, the California-based company that produces and sells hologram-decorated bracelets that it claimed improved flexibility, strength, and balance, has filed for Chapter 11 bankruptcy in Santa Ana, California, reports the Associated Press.

It seems that the company’s financial woes came after an Australian distributor of its goods was forced by that country’s regulators to retract some of the statements it made about the potential benefits of Power Balance bracelets. In addition to claiming that they improved a number of indicators of physical fitness, the Australian distributor apparently claimed that the bracelets would improve wearers’ "natural energy."

Enforcers challenged these claims and, without hard science to back them up, Power Balance was forced to issue a statement essentially claiming it had fabricated information about its bracelets. Among its retractions and “corrective ads,” Power Balance LLC acknowledged that it violated Australia’s Trade Practices Act of 1974.

Following the settlement with authorities, Power Balance agreed to refund the money of any customers who felt they had been unfairly treated or taken advantage of by the company’s ads and claims. It seems that these refunds, in addition to lost sales around the world, badly hurt the company’s bottom line.

Following that incident, the company’s sales in the U.S. and abroad plunged, according to sources. Still, the company has been clear that its Chapter 11 bankruptcy will be a reorganization of debts and that it plans to stay in business throughout the duration of its case.

Already, news outlets (including TechCrunch.com) are reporting on the company’s newest offering, a mouth guard that promises to improve athletic performance and prevent injury by optimizing jaw and spine alignment.

In promotional materials for the mouth guards (called Performance Mouth Gear), the Power Balance team has reportedly cited several published scientific papers that support its health-focused claims.

Whether or not the product will win over athletes and others remains to be seen, but already it seems Power Balance is proceeding with greater caution than before. With its bracelets, the group touted an increase of up to 500% in "strength, power, and flexibility," none of which can easily or neatly be measured with any precision.


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