Jolt Cola has filed for Chapter 11 bankruptcy protection due to a dispute with drink can maker Rexam.
Jolt is the syrupy soft drink that has twice the caffeine of other regular cola, according to its marketing.
Jolt said it needs a capital infusion if it wants to be competitive, but acknowledged that its liabilities make that unlikely. Jolt lost ground to competitors like Rockstar, and Monster. The economic downturn left it struggling against competitors that were financially stable enough to reduce their prices.
A contract with can maker Rexam required Jolt to purchase 90 million cans with resealable caps. At three times the price of normal cans, Jolt just did not have the cash to keep up its part of the bargain. It has only purchased 27 million cans so far.
In its Chapter 11 filing, Jolt, which does business as Wet Planet Beverages, listed assets and debt in the range of $1 million to $10 million. Rexam, which is owed about $2.1 million, was named as the largest unsecured creditor. The company hopes to sell itself through a court-supervised auction.
Jolt filed papers asking the U.S. Bankruptcy Court in Rochester to approve bidding procedures to auction its assets. The lead bid from New York-based private equity investor Emigrant Capital Corp. is for $1.73-million.
Emigrant was listed in court papers as one of Jolt's largest shareholders, with 108,000 preferred shares. Jolt, which retained William Blair & Co. to study its financing alternatives in early 2008, is seeking a hearing on the court's approval of the winning bid by November 25, 2009.
Jolt Cola was created in 1985 by C.J. Rapp as a highly caffeinated drink and is sold across the United States, Canada and, Europe.
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Jolt is the syrupy soft drink that has twice the caffeine of other regular cola, according to its marketing.
Jolt said it needs a capital infusion if it wants to be competitive, but acknowledged that its liabilities make that unlikely. Jolt lost ground to competitors like Rockstar, and Monster. The economic downturn left it struggling against competitors that were financially stable enough to reduce their prices.
A contract with can maker Rexam required Jolt to purchase 90 million cans with resealable caps. At three times the price of normal cans, Jolt just did not have the cash to keep up its part of the bargain. It has only purchased 27 million cans so far.
In its Chapter 11 filing, Jolt, which does business as Wet Planet Beverages, listed assets and debt in the range of $1 million to $10 million. Rexam, which is owed about $2.1 million, was named as the largest unsecured creditor. The company hopes to sell itself through a court-supervised auction.
Jolt filed papers asking the U.S. Bankruptcy Court in Rochester to approve bidding procedures to auction its assets. The lead bid from New York-based private equity investor Emigrant Capital Corp. is for $1.73-million.
Emigrant was listed in court papers as one of Jolt's largest shareholders, with 108,000 preferred shares. Jolt, which retained William Blair & Co. to study its financing alternatives in early 2008, is seeking a hearing on the court's approval of the winning bid by November 25, 2009.
Jolt Cola was created in 1985 by C.J. Rapp as a highly caffeinated drink and is sold across the United States, Canada and, Europe.
Source
My comments
NOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO
