Sources have revealed that Juul Labs Inc. is expected to begin discussing financing with lenders as soon as this week, potentially leading the e-cigarette company to file for bankruptcy protection.
One source stated that Juul has received inquiries from lenders and is soon to formally request a financing plan from holders of its bankrupt assets. This financing option would allow the company to pay for daily expenses and continue its operations during the bankruptcy protection period.
The preparation work is not final, and the plans may change," said a spokesperson for Juul. The company is still considering alternative options, the spokesperson stated. "As we determine which path is best for our company, we will continue to prepare for restructuring and other strategic choices.
After the FDA banned Juul products from entering American shelves, Juul hired bankruptcy advisers Kirkland & Ellis and Alvarez & Marsal in June, citing a lack of evidence to prove their overall safety. As previously reported by Bloomberg, since then, the company has been considering bankruptcy filings while seeking various financing options and preparing.
Earlier, Reorg reported that Juul is preparing a document. Juul has temporarily won against the FDA, allowing their products to continue being sold on the market despite the FDA's marketing refusal.
Juul is facing losses amounting to hundreds of millions of dollars due to a string of lawsuits alleging that it targeted minors. The company has agreed to settle some claims for over $500 million, including entering into a preliminary agreement with 33 states to resolve a two-year bipartisan investigation into its marketing and sales practices.
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