On June 16 Vital Pharmaceuticals, Inc. (VPX) filed an emergency motion to hold Jack Owoc and his wife Megan in contempt. The Owocs had been running Bang until March 9. 

VPX, the parent company of energy drink maker Bang Energy, is slated for auction through U.S. Bankruptcy Court. But they are having problems getting the information they need to make it happen.

The court filing claims the action is necessary because the Owocs refuse to cooperate with the court orders to return all assets, property, devices, and documents from Bang, Inc.  

VPX is frustrated with the Owocs' claims that they have nothing that belongs to the company. Meanwhile, they are trying to package the company for a court-approved sale.

Emergency Motion to Hold Owoc in Contempt (1).pdf

Jack Owoc built Bang

 John “Jack” Owoc was the company founder and had previously been listed as Bang’s CEO and sole shareholder. And Megan Liz Owoc had served as Senior Vice President of Marketing for the company.

According to the latest court documents, on March 9 the VPX Board terminated the Owacs from their positions.  Jack Owoc responded by sending an email to all Company personnel entitled “HOSTILE TAKEOVER – MEG AND JACK FIRED!” 

The documents went on to outline the strong resistance by the Owacs to let go of the company.

According to the filing: “That same day, the Debtors sent letters to the Owocs confirming their termination and requesting that they each “return all of the Debtors’ property, including identification cards or badges, access codes or devices, keys, mobile phones, computers, credit cards, physical files and any other property and information in [their] possess.” 

“Neither of the Owocs returned any devices, documents, or other property following their termination. While the Debtors moved swiftly to suspend the Owocs’ access to the Company’s servers upon their termination, Mr. Owoc was able to gain access to a legacy email domain, from which he sent an email to all Company personnel entitled “HOSTILE TAKEOVER – MEG AND JACK FIRED!” 

“In the days following their termination, the Debtors made efforts to determine what documents, devices, and other information the Owocs may have retained following their termination. Because Mr. Owoc, in particular, largely operated the Company from his house, the Debtors had reason to believe that he may have retained multiple electronic devices that had been purchased with Company funds and used in connection with the Debtors’ business, as well as an unknown amount of Company-related information.”

Jack Owoc testifies he has no VPX property

According to the court docs, VPX claimed that the Owocs had “Debtor-provided laptops, mobile devices, physical files, and other materials in their possession.” 

Owocs testified that everything belonged to him because of “the excellent job he was doing.” 

The court filing also claims that Owoc went on to testify that he didn’t have anything that belongs to the debtors or VPX.

He also testified under oath that the computer used for company business “hasn’t been turned on since [he] found out [the Company] remotely shut it down,” and stated that he had not provided any company documents to his counsel in response to discovery requests because “I don’t have any documents.” 

Latest Litigation

In its January 27, 2023, motion to sell the business, VPX said it already started marketing the company to potential buyers. And the process would go through its investment bank, Rothschild & Co.

On Feb. 24, U.S. Bankruptcy Judge Peter Russin approved the motion to hold a court auction for VPX business entities on April 27. 

This is not the first time that things have gone haywire at Bang.

Background Litigation

When Weston-based VPX filed Chapter 11 reorganization in October 2022 they had listed more than $1.7 billion in liabilities.

The company disclosed its primary reasons for filing the bankruptcy as litigation from rival Monster Energy. And a faulty distribution agreement with PepsiCo.

The initial bankruptcy case primarily stemmed from unfavorable outcomes in legal disputes.

 In January 2022, Monster Energy and its affiliate, Orange Bang, emerged victorious in an arbitration case held in a California court. The case was related to a trademark infringement claim against VPX. Following the court's denial of VPX's request to overturn the judgment of $214.8 million, VPX decided to appeal the decision to the 8th U.S. Circuit Court of Appeals.

In September 2022, Monster Energy achieved a favorable outcome in a separate case against VPX and Owoc. A jury awarded Monster Energy $292.9 million based on claims of false advertising, trade secret misappropriation, violation of the federal Computer Fraud and Abuse Act, and interference with contracts for retail shelf space. 

Bang was accused of interfering with its rival’s dealings with retailers and falsely advertising the mental and physical benefits of Bang drinks.

Following the court's denial of VPX's request to overturn the judgment of $214.8 million, VPX decided to appeal the decision to the 8th U.S. Circuit Court of Appeals. And it was initially agreed that Bang would pay Orange Bang and Monster 5% of net sales through an arbitration award.

Both rulings were some of the largest trademark infringement awards in US history. 

One Bang after another

On February 17, VPX initiated a lawsuit in bankruptcy court against Orange Bang and Monster Energy. The purpose of the lawsuit was to ensure that any potential buyer of Bang Energy would be bound by the arbitration award between VPX and Monster Energy. As per the current agreement, VPX can continue using the Bang Energy trademarks by paying Monster Energy 5% of net sales.

 VPX was hoping that any prospective buyer of the company would be willing to maintain the 5% arrangement in an effort to retain access to the valuable Bang Energy trademarks.

 At the time of its October 2022 Chapter 11 filing, the company had 1,103 employees and $581 million in assets.

According to its case summary, VPX had year-to-date revenue of $442 million through August 2022. And all of 2021 revenues were $728.3 million. It’s one of the largest private companies in Florida.