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the Joshua Schall Audio ExperienceAuthor: Joshua Schall
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Owner of MuscleTech & Hydroxycut Files For Bankruptcy | Iovate Health Sciences International
Wednesday, 17 September, 2025
At least to me, it seems everywhere you turn…iron-clad sports nutrition brands of the past are now showing huge cracks in their armor. So then, why does the industry appear shocked by the recent Iovate Health Sciences International news? For those that haven’t already read the headlines, (last week) Iovate Health Sciences International filed voluntary petitions for protection under Chapter 15 of the Bankruptcy Code. But unlike other chapters that address domestic bankruptcies, Chapter 15 doesn’t involve a full liquidation or reorganization of the debtor through the U.S. court system. Instead, Chapter 15 is an administrative process to grant U.S. recognition to a foreign proceeding…designed to facilitate cross-border insolvency cases involving debtors, creditors, and assets in multiple countries. Thus, Iovate Health Sciences International is utilizing the bankruptcy proceedings to stabilize its operations and pursue an orderly cross-border restructuring…because if you didn’t realize, the parent company of supplement brands like Hydroxycut and MuscleTech is headquartered in Canada. Founded in 1995, Iovate initially began as MuscleTech Research and Development…launching as a direct-to-consumer mail order business with just three products, one of which was the original Hydroxycut formula. A year later, MuscleTech expanded into physical retailers like GNC…and then soon after launched the infamous Cell-Tech product, along with Nitro-Tech, quickly becoming the first (and probably only) occurrence in supplement industry history that a single brand owned the top-selling fat burner, creatine, and protein powder products simultaneously. But while Iovate continually evolved its family of sports nutrition and wellness brands throughout the 21st century, the current portfolio includes the beforementioned MuscleTech and Hydroxycut (which eventually got spun off into a standalone brand), but also Six Star Pro Nutrition and Purely Inspired. And I can continue being nostalgic and overly positive by sharing numerous commercial highlights, but that wouldn’t tell the entire business story. In fact, a central reason for changing the company name to Iovate Health Sciences International resulted from an original MuscleTech bankruptcy filing in June 2005…which got triggered after it faced thousands of lawsuits mostly related to Hydroxycut products containing ephedra. And I can go on and mention many other lawsuit settlements and reputational blunders…but in 2016, Xiwang Foodstuffs acquired Iovate Health Sciences International for reportedly north of a half-billion dollars. So, what caused this bankruptcy? The largest trade payable is the organic nutritional products brand Orgain, which (as of 2022) is now majority owned by Nestle Health Science. While the legal battle wasn’t publicized much, Orgain filed a trade dress infringement lawsuit against Iovate…alleging that the Purely Inspired mimicked the Orgain packaging. Then, in April 2024, a U.S. court ordered Iovate to pay Orgain $12.5 million for copying its product labeling. But after Iovate failed to pay, Orgain obtained a writ of garnishment against Walmart, which withheld approximately $8 million in outstanding accounts receivable payments…severely impacting the working capital of Iovate. And as you’d imagine, this liquidity crunch ended up being a central reason why Iovate defaulted on its secured debt with Royal Bank of Canada. But while the protracted legal battle with Orgain might’ve been the “straw that broke the camel’s back,” it hardly explains everything.
