CortiSlim Maker Seeks Bankruptcy Protection

A legal skirmish with the Federal Trade Commission has pushed the maker of CortiSlim, a purported diet pill, into federal bankruptcy court.

Last week, Brea-based Window Rock Enterprises Inc. filed for Chapter 11 protection from its creditors in U.S. Bankruptcy Court in Santa Ana.

The company was sued in September 2004 by the Federal Trade Commission, which alleged that Window Rock falsely claimed CortiSlim spurred weight loss.

Two co-defendants, chemist Shawn Talbott and marketer Thomas Cheng, have settled with the FTC, agreeing to pay $4.5 million in cash and assets. But Window Rock still faces an FTC claim of $160 million, which represents the company’s revenue from CortiSlim at the time the lawsuit was filed.

Including that sum, Window Rock has potential debt of nearly $200 million against cash assets of about $8 million, company attorney Robert E. Opera said.

Under Chapter 11, a company can continue operating while it fashions a plan to pay creditors. Opera said Window Rock hoped to emerge from bankruptcy protection within four months.

CortiSlim, which was promoted heavily on TV and radio, has grossed more than $200 million. It remains on the market, but its advertising has been rewritten to avoid claiming that the pills reduce weight.

Additional defendants in the FTC lawsuit include former CortiSlim spokesman Greg Cynaumon and Window Rock founder Stephen Cheng.