Power Balance, the Southern California wristband company that purchased the naming rights of the Sacramento Kings' arena earlier this year, filed for bankruptcy protection last week, documents show.
The company's filing for Chapter 11 reorganization comes after it settled a $57.4 million class action lawsuit in September filed by customers who charged the company with false advertising. Power Balance officials denied a report on TMZ that the company would close.
Kevin Boyle, an attorney with Panish, Shea & Boyle and the lead counsel on the case against Power Balance, confirmed the settlement for The Bee. There is a 1:30 p.m. court hearing scheduled for today on Power Balance's bankruptcy filing.
A phone message and email left with Power Balance was not immediately returned.
Under the terms of the lawsuit, anyone who has purchased a Power Balance wristband can receive their $30 back, plus $5 for shipping and handling, Boyle said.
Chris Clark, a spokesman for the Kings, said the team was aware of Power Balance's bankruptcy filing.
"We maintain close communications with Power Balance and are aware of their decision to file for voluntary protection available to them through the courts," Clark said. "They have been good partners since day one and are understandably taking steps to put the company in a position to continue innovation in the performance technology sector. They have assured us of their commitment to the Sacramento Kings and the surrounding community and we expect to continue our productive partnership through this process and into the future."
Power Balance filed voluntary bankruptcy protection in federal court in Santa Ana on Friday.
The company entered into a five-year naming deal with the Kings for the former Arco Arena earlier this year, just two months after Power Balance was sued for false advertising.
Power Balance was founded by two Orange County men. The wristbands are marketed for helping balance and athletic performance and are worn by many high-profile professional athletes.