• by Steve Ellwanger , October 10, 2022

Litigation-besieged Bang Energy drink parent Vital Pharmaceuticals Inc. filed for Chapter 11 bankruptcy on Monday but said it would continue operating with the assistance of $100 million in anticipated financing.

Following the 1993 founding of Vital Pharmaceuticals, Bang made a big splash in the then-nascent energy drink category—but a failed distribution deal with PepsiCo Inc. and lawsuits have sapped distribution and revenue over the past several years.

In a statement accompanying the filing, Vital Pharmaceuticals—which does business as VPX Sports—touted deals with 269 “best-in-class distributors” for an imminent direct-store-distribution network covering “nearly 95% of the United States market.”

As VPX officially ends its previous relationship with PepsiCo at the end of October, the new DSD network “will be closer to 100%” of U.S. market reach.

In March of 2020, VPX and PepsiCo signed a deal under which PepsiCo was the exclusive U.S. distributor of Bang Energy products—a deal that quickly deteriorated into a legal battle over PepsiCo’s performance and ends this month.

In Monday’s statement, VPX CEO Jack Owoc blamed PepsiCo for a decline in Bang’s market share of “roughly 3.4%" from its previous share of 9.7%.

In August, PepsiCo Inc. announced a $550 million investment in energy drink marketer Celsius Holdings Inc. for an ownership stake of just under 10%.

On the legal side, VPX’s most recent losses came in lawsuits involving Monster Beverage Corp.

In 2020, Monster joined with Orange Bang Inc. in legal proceedings against VPX for allegedly violating Orange Bang trademarks. An arbitrator’s award of $175 million to Monster included the stipulation that VPX pay Monster and Orange Bang an ongoing 5% royalty on all future net sales of Bang products.

Earlier this month, Monster was awarded $293 million in a lawsuit in which Monster accused VPX of false advertising, unfair competition and other behavior regarding Bang’s ingredients and health effects.

Owoc said on Monday that the company’s “inspired and positive creations” for the beverage industry had led to lawsuits involving Monster and Pepsi—calling them “basically Big Beverage.”

 VPX said the $100 million in anticipated financing is from the company’s “esteemed syndicate lenders.”