Power Balance, the Laguna Niguel company behind the silicone bracelets favored by athletes such as Shaquille O'Neal, has filed for Chapter 11 bankruptcy.
The company has suffered a net loss of more than $9 million in the 10 months ending in October after earning a $11.7 million profit last year, according to documents filed in federal court in Santa Ana on Friday.
Its bracelets contain "hologram technology adopted from Eastern philosophies that is believed to improve and enhance people's lives," according to the filings. Power Balance employs about 40 people.
The company has struggled with a class action lawsuit originating from "inappropriate marketing claims" from an Australian distributor, which in turn led to Power Balance losing customers around the world.
Advertisements claimed that the wristbands improved balance, strength and flexibility — benefits that the Australian Competition and Consumer Commission challenged.
The agency said last year, after Power Balance admitted that there "is no credible scientific basis for the claims," that consumers who felt misled would be offered a refund.
This story was reported by Times Staff Writer Tiffany Hsu.