Nutraquest Files Chapter 11

MANASQUAN, N.J.--Facing continued legal battles, Nutraquest Inc. (formerly known as Cytodyne Technologies) filed a voluntary petition in the U.S. Bankruptcy Court for the District of New Jersey for Chapter 11 bankruptcy protection. The company called the filing a "positive step" to allow it to reorganize and rebuild its organization.

"As with many other industries that have been plagued with litigation, this small company simply could not handle the financial and time-consuming drain of the increasing lawsuits filed by plaintiffs' lawyers across the country," the company said in a statement. The filing automatically stays all litigation against the company.

There are several pending cases regarding the company's product Xenadrine RFA-1, an ephedra-based diet formula. They include a lawsuit filed by Northwestern University related to the death of football player Rashidi Wheeler, another filed by Kiley Bechler stemming from the death of Baltimore Orioles pitcher Steve Bechler, and a Nutraquest appeal of a California class action decision ordering the company to pay $12.5 million in consumer restitution.

In late May, Nutraquest sold the licensing and marketing rights to all Cytodyne products to Evergood Products Corp. in Hicksville, N.Y.; its Phoenix Laboratories contract manufacturing division had served as Cytodyne's manufacturer for years. According to a Nutraquest executive, in the transaction, Nutraquest retained all liability associated with lawsuits concerning Xenadrine RFA-1 that were filed prior to the closing.

In an interesting turn, Linda Will, Wheeler's mother, amended her pending litigation. She originally did not sign on with Northwestern to sue Cytodyne and Phoenix Labs, but joined the school's suit this summer. On Oct. 21, however, she returned to her original claim against Northwestern alleging her son suffered an acute asthma attack during football practice and that school personnel delayed obtaining medical attention.