The American arm of a Chinese swimming pool products manufacturer has declared bankruptcy after being hit with a $16 million false advertising and unfair business practices judgment in North Carolina. Blueworks Corp. had previously warned that the hefty judgment would drive it out of business.
Chapter 11 Bankruptcy Filing
Blueworks Corp. filed for Chapter 11 protection on Tuesday, reporting assets between $500,000 and $1 million and liabilities between $10 million and $50 million. The company’s largest creditors include Hayward Industries Inc., a rival pool supply company that secured a $16 million judgment against Blueworks in May after a weeklong jury trial.
“The four-year lawsuit was crippling for the debtor’s financial operations and ability to focus on the day-to-day management of its business,” Blueworks’ chief restructuring officer, Michael Bowers, said in an affidavit submitted with the Chapter 11 petition.
Blueworks Corp files for bankruptcy : Financial Strain from Legal Battles
Blueworks, a distributor for Chinese manufacturer Ningbo C.F. Electronic Tech Co. Ltd., faced a $4.9 million verdict in March after a federal jury in Charlotte found it made false or misleading statements, violating the North Carolina Unfair and Deceptive Trade Practices Act (UDTPA) in its Amazon product listings. U.S. District Judge Max O. Cogburn Jr. tripled that award to $14.7 million and added $1.3 million in prejudgment interest, resulting in a total judgment of $16 million.
