Bang Energy brand owner Vital Pharmaceuticals can tap into US$34m of a new $100m credit line to help pay its bills, a bankruptcy judge has said.
The ruling on Thursday (13 October) in Florida comes despite objections from the energy drink maker’s rival Monster Beverage Corp, reported Bloomberg. VPX’s Bang Energy owes Monster $293m after losing a false-advertising lawsuit to the CSD giant earlier this month.
VPX filed for bankruptcy this week, filing for Chapter 11 protection as “a restorative action to help the company recover from recent challenges”. The company said it had secured $100m from unnamed “esteemed syndicate lenders”, in order to keep it afloat whilst it seeks a more permanent solution.
The lenders are a group of banks to which the company already owes more than $350m, Bloomberg reported.
Monster’s objections to the loan are thought to relate to the fact that the deal will give VPX’s lenders better claim to the Florida-headquartered firm’s assets when the rest of the $100m is drawn. Monster’s lawyers claim that this bumps its position to that of a lower-ranking creditor, meaning it would be less likely to receive the funds it is due in the event of VPX entering liquidation.
The Canarchy brand owner is also said to be frustrated by tight milestones in the financing terms of the loan, which it fears could dampen bidding on Bang’s assets in the event of a selloff.
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Just Drinks has approached both VPX and Monster for comment.
It has been a turbulent few years for VPX’s Bang Energy brand, which has seen the company fall out spectacularly with its previous distributors PepsiCo, as well as losing legal tussles with the Gatorade brand owner and with Monster.
Earlier this week, following the Chapter 11 announcement, the company appointed former PepsiCo exec Kathy Cole as its chief operating officer. Cole joined the company from Harvest Sherwood Food Distributors, one of the US’s leading independent food distributors, where she held the position of president and COO.