Bankruptcy Judge Peter D. Russin approved the $362 million sale of Vital Pharmaceuticals (VPX), the parent company of energy drink maker Bang Energy, to Corona, California-based Monster Energy, the South Florida Business Journal reported. The order canceled the previously scheduled auction for VPX and declared the offer from Monster Energy was the best deal received for the company. The Federal Trade Commission did not object to the transaction. However, many VPX employees will be out of work, as the company recently filed notice to lay off 463 employees in Broward County, Fla. VPX filed for chapter 11 reorganization protection in October 2022. Among its largest creditors was Monster Energy, which won a $292.9 million jury verdict over false advertising, trade secret misappropriation, violation of the federal Computer Fraud and Abuse Act, and interference with contracts for retail shelf space, plus a separate $214.8 million judgment over trademark infringement. In total, it had more than $1.7 billion in liabilities. VPX filed a lawsuit in bankruptcy court against Monster Energy, seeking to ensure that whoever buys Bang Energy may continue using the Bang Energy trademarks, as long as Monster Energy receives 5% of the sales proceeds from those products. Monster Energy had refused to guarantee that. In June, VPX filed another lawsuit in court against former CEO John “Jack” Owoc, demanding that he turn over the intellectual property for Bang Hard Seltzer to VPX so it could be included in the sale. The sale agreement with Monster Energy resolves the lawsuit with VPX. Under the deal, judgments held by Monster Energy that would otherwise be considered priority claims would be considered unsecured claims, meaning Monster Energy would recover a lower percentage of its claims. Monster Energy will pay $362 million, plus contingent consideration of up to $10 million, for the assets of VPX. Monster Energy would let creditors recover the first $5 million from VPX before it starts collecting its unsecured court judgments. (Subscription required.)
