MusclePharm Faces Increasing Number of Lawsuits by Anthony Roberts
Over the past few months, supplement company MusclePharm has increasingly found itself as the target of lawsuits. From their inception they've had severe financial issues, ranging from non-payment of debts of under a hundred dollars to nonpayment of debts up to hundreds of thousands of dollars -the latter nonpayment resulting in them being sued for stock by a company who bought the debt from World Extreme Cagefighting. Their press releases, which often present a cheery outlook of the company as it lost millions of dollars per quarter, belied the fact that they frequently changed auditors and filed SEC statements doubting their ability to continue staying afloat. Despite this, in 2010 the executives awarded themselves millions of dollars in stock options (no press release on that one), only to return their 2011-12 bonuses (heralded by a cheery press release full of platitudes on "commitment" and "revised methodology").
Had they continued to run the company in the fashion to which they'd become accustomed (bonuses for six-figure-salary executives during multimillion dollar loss periods, overstated sales projections, spending $4 to make $1, etc...), they would have been out of business by now. An influx of new talent in the form of Jeremy DeLuca (of bodybuilding.com) and his check book, are the only reason they're still afloat - despite a stock that trades for less than the Mexican peso.