Irwin Naturals Inc., a well-known supplement company, is facing a major financial crisis after failing to make payments on a $40 million loan from East West Bank (EWB). The situation escalated when Irwin Naturals, led by CEO Klee Irwin, allegedly defaulted on the loan and engaged in actions that EWB claims involved self-dealing and the misappropriation of company funds.
This led EWB to take legal action, which included a lawsuit filed against Irwin Naturals. The lawsuit details the company’s outstanding debt of over $18 million, with Irwin personally liable for an additional $7.6 million. To protect its interests, EWB exercised its voting rights, resulting in the removal of Irwin from the company’s board and the appointment of Michael Tucker as a new board director. The bank also requested that a receiver be appointed for Irwin Naturals and that Irwin be removed from his executive role within the company.
In May, Irwin announced his intention to file for bankruptcy, which subsequently materialized as a Chapter 11 filing. This move, according to bankruptcy expert Adam Stein-Sapir of Pioneer Funding Group, signifies Irwin Naturals’ intention to reorganize rather than liquidate the company. Stein-Sapir explained, “As Irwin’s lender, EWB was also able to sweep all cash and generally prevent the business from continuing to operate.” He added, “The bankruptcy filing can be seen as an action by Irwin to retain control of its operations and put a pause on the California state court proceedings.”
The coming months will be critical for Irwin Naturals as it explores options to refinance the loan, renegotiate repayment terms, or potentially sell the business. The bankruptcy process could provide the company with the necessary breathing room to stabilize its operations, but the road ahead remains uncertain.
The bankruptcy filing includes a list of creditors, such as the legal firm Clark Hill and Canadian accounting firm MNP LLC, among others. This list is expected to be updated within 45 days, potentially revealing additional financial obligations. The lack of recent financial statements from Irwin Naturals further complicates the situation for investors and creditors.
Irwin Naturals’ market presence has significantly diminished. Its investor relations page is no longer accessible, and the company’s stock is currently under a Cease Trade Order issued by the British Columbia Securities Commission due to the company’s failure to file financial statements.
As Irwin Naturals navigates this challenging period, the future of the company remains in flux. The outcome of the restructuring efforts under Chapter 11 will likely shape the next chapter in the corporate saga of Irwin Naturals.
