Juul Moves to Enter Financing Talks for Potential Bankruptcy




  • In Business
  • 2022-10-04 22:48:36Z
  • By Bloomberg
 

(Bloomberg) -- Juul Labs Inc. is beginning talks regarding funding for a potential Chapter 11 bankruptcy, according to people with knowledge of the preparations.

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The e-cigarette manufacturer has engaged in informal talks regarding so-called debtor-in-possession financing, said the people, asking not to be named discussing private information. Formal discussions with potential lenders are expected to progress in the coming days, one of them said.

The preparations aren't final, and plans could change. A spokesman for Juul said the company is still considering other avenues.

"We will continue the preparation process for both a restructuring and other strategic options as we determine what path is best for our company," the spokesman said.

Juul hired bankruptcy advisers Kirkland & Ellis and Alvarez & Marsal in June after the FDA banned Juul products on US shelves, citing a lack of evidence demonstrating their overall safety. The company has been mulling a possible bankruptcy filing since then, along with pursuing various financing options, as previously reported by Bloomberg.

Reorg reported earlier that Juul was preparing for a filing.

The company won a court order temporarily blocking the FDA decision, and the agency separately stayed its ban, allowing the company to continue selling products.

Juul has also faced hundreds of millions of dollars in damages from a barrage of lawsuits alleging it targeted minors.

It has agreed to settle certain of those claims for more than $500 million, including through an agreement in principle with 33 states to resolve a two-year bipartisan probe into its marketing and sales practices.

(Updates to add earlier report in sixth paragraph.)

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