Bang files for bankruptcy as compensation payments pile up
Bang Energy, which rose to become one of the top three energy drink brands in the United States, has filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code.
For the past few years, it had been facing numerous lawsuits from brands like Monster Energy, and the compensation payments have ballooned to an enormous sum (roughly close to 100 billion yen just from what can be seen), leading to the bankruptcy filing.
Bang Loses Lawsuit Over "Super Creatine" in Bang Energy
Bang claims that "Super Creatine" is included as an energy ingredient in their product.
Monster Energy argued that "Super Creatine misleads consumers into thinking it provides better effects than regular creatine. However, Super Creatine is simply water-soluble creatine, and in order to see measurable effects, more than 100 cans would need to be consumed. It is a false advertisement with no health benefits as promoted." Monster Energy further claimed that the appeal of Super Creatine helped Bang Energy gain market share, resulting in a loss of $271.9 million in profits for Monster Energy.
In addition to the ingredient claims, Monster Energy filed several other lawsuits, all of which were won by Monster Energy. As a result, Bang was ordered to pay $293 million in damages (about 43.9 billion yen).
The breakdown of the $293 million includes $272 million for false advertising (ingredient claims), $18 million for tortious interference, and $3 million for trade secrets (leaked information from former Monster Energy employees).
VPX Faces Numerous Compensation Payments
Bang has also been sued for trademark infringement by another beverage company, "Orange Bang," and was ordered to pay $175 million (26.2 billion yen) in compensation and $9 million (1.35 billion yen) in legal fees. Additionally, Bang was ordered to pay 5% of its future U.S. sales.
In another case, Bang was sued by three major record labels for using music on social media without permission, and infringement was confirmed in two cases.
Bang also reportedly faces an obligation to pay $115 million (17.2 billion yen) in compensation due to an early termination of its partnership with PepsiCo.
With these mounting costs, Bang filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code in Florida. If the filing is accepted, Bang will aim for a restructuring while continuing business operations. The goal is to further expand its U.S. market share from 9% to 20%.
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In 2001, while living in the United States, I encountered energy drinks through the dance scene and was deeply impressed. After returning to Japan, I found that energy drinks were considered novelty beverages, so I established a comprehensive website in 2013 to share the true appeal of energy drinks. As an energy drink enthusiast, I began drinking them seriously again, collecting over 7,000 varieties of energy drinks from various countries. I am also active as a critic and expert, receiving media interviews.
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