(Umm…sure, I’ll take a sip.)
Xyience – which makes the energy drink, Xenergy – has been one of the UFC’s primary sponsors the past few years, but that might be changing. The company filed for bankruptcy protection and claims they received intimidation and death threats. The energy drink business is more cut-throat than we thought.
John G. Edwards reported the story today for the Las Vegas Review-Journal:
Xyience Inc., the energy drink company headquartered at 4572 Hacienda Ave., reported $42.3 million in liabilities and $5.3 million in assets. Xyience sells its energy drink through 230 convenience and grocery stores, mostly in the Southwest.
The voluntary bankruptcy petition, filed on Friday, follows an involuntary petition that was filed Jan. 3 by founder and former CEO Russell Pike and others. The involuntary petition remains pending.
The bankruptcy petitions for Xyience were filed under Chapter 11, which provides protection from creditors while the company reorganizes.
When a company goes belly-up, why do they always claim to be “reorganizing”?
Despite the ominous circumstances, Xyience President Omer Sattar expressed optimism.
“We’re excited about the opportunity (to reorganize the company), ” he said. “Xyience has a great brand name and has a strong affiliation with the UFC.”
The article says that a representative for Dana White declined to comment and/or didn’t make Baldy available for comment. Rest assured, he’ll make some comment soon. He just can’t help himself. Frank and Lorenzo Fertitta have also not commented. You’ll recall they are part of the
mob family that owns the UFC. In an interesting sub-plot, they are creditors of Xyience to the tune of $12.5 million in unsecured claims and $5.3 million in secured claims. This was all in the bankruptcy filing.
Sattar said Xyience is still a UFC sponsor. The company inked a $15 million deal to sponsor the fighting organization for 2007.
Sattar said the bankruptcy became necessary when the company was unable to raise $7.5 million more from shareholders.
“Those negotiations, however, were derailed by a campaign of intimidations and threats led by company founder and former CEO Mr. Pike, Terry Cardenas, Ronald Solomon and Rick Klingenberg,” he said.
“Associates of Mr. Pike and Mr. Klingenberg made threats of physical violence against Xyience management and board members and, on at least one occasion, showed up uninvited at the home of one member of management,” Sattar said in bankruptcy court filings.
“Mr. Klingenberg and his brother David Bergstrom stormed into the Xyience office, cornering (Chief Financial Officer) Michael Levy in an office and refusing to allow Mr. Levy to depart until their demands were met,” according to Sattar’s filing.
If their mother wasn’t paid, Klingenberg and Bergstrom said “somebody was going to … get killed,” Sattar said.
They demanded $20,000 “or else they would return the next day with guys who had a 100 percent collection rate,” according to Sattar’s filing.
Attempts to reach Pike, Bergstrom and Klingenberg for comment Monday failed.
Such a shocker that Pike, Bergstrom and Klingenberg aren’t commenting on this. Maybe they’ve learned from another Vegas bad boy’s mistakes. And who are the dudes who have a 100% collection rate? I’m still trying to collect my winnings from my fantasy football pool, so if anyone can hook me up…