Skinny Nutritional Corp., the local flavored-water marketer that saw most of its board resign earlier this year, has filed for Chapter 11 bankruptcy protection.
What appeared to be a corporate-
governance revolt in January has progressed into a fight to keep the Skinny Water brand from falling into the hands of a secured lender.
The Bryn Mawr company listed total assets of $2.9 million and total debts of $6.0 million in documents filed in U.S. Bankruptcy Court in Philadelphia.
In a filing with the Securities and Exchange Commission on Wednesday, Skinny Nutritional stated that the "decision to seek protection under Chapter 11 was triggered" by an attempt by New York-based lender Trim Capital L.L.C. to foreclose on certain assets, including its portfolio of trademarks.
Skinny Nutritional said in a statement that Trim Capital had failed to complete its financing obligations under an agreement, struck last June, that would have provided up to $15 million in funding. The lender provided only $1.27 million, the beverage maker said.
Filing for Chapter 11 was necessary "to preserve value for the shareholders," chairman and CEO Michael Salaman said in a statement. "The loss of the trademarks would have been devastating to the company."
It's the latest setback for the consumer-products firm, which saw three of its four board members resign in January. Michael Zuckerman, John J. Hewes, and Francis W. Kelly each submitted letters to the SEC that were critical of how Salaman was running Skinny Nutritional.
In addition to being a board member, Zuckerman is a principal in a King of Prussia packaging company that supplied 16-ounce bottles to Skinny Nutritional. Zuckerman-Honickman Inc. sued the company in Montgomery County Court in February, contending Skinny Nutritional owes about $490,000 for bottles that were produced and shipped.
Salaman said in that statement that the company "believes that future sales are promising. We see a future . . . for the company and the Skinny brand."