MIDWAY, Utah, Aug. 17 (Our Utah Times) — Rebel Creamery LLC, a Utah-based maker of ice cream products sold through grocery retailers nationwide, has filed for Chapter 11 bankruptcy protection while appealing a $23.785 million federal court judgment in favor of rival Van Leeuwen Ice Cream.
Rebel filed its voluntary petition Aug. 14 in the U.S. Bankruptcy Court for the District of Utah. Its bankruptcy schedules report about $13.78 million in assets and $23.85 million in liabilities.
The filing places the company’s finances under the supervision of the bankruptcy court while Rebel seeks to reorganize. The records say funds will be available for distribution to unsecured creditors, which are creditors that generally do not hold collateral securing their claims.
What is the largest claim?
Van Leeuwen is listed as an unsecured creditor with a claim of about $23.785 million. Rebel marked the claim as disputed and said the underlying judgment is under appeal.
The claim stems from a federal lawsuit filed by Van Leeuwen in 2021. The company alleged that Rebel copied the appearance of its ice cream pint packaging, a type of dispute known as trade-dress litigation. Trade dress refers to the visual features of a product or its packaging that can identify its source.
U.S. District Judge Eric Komitee ruled July 16 that Rebel intentionally infringed and diluted Van Leeuwen’s trade dress. In the same ruling, the court awarded Van Leeuwen $23.785 million and ordered Rebel to stop selling products in the packaging at issue and redesign it.
Rebel filed its appeal Aug. 12, two days before the bankruptcy petition. The available court-record summaries do not show the current status of the appeal, whether the judgment has been stayed or secured, or whether Van Leeuwen has objected to the bankruptcy filing.
What does Rebel own?
Rebel’s schedules list about $5.22 million in cash and cash equivalents, $2.59 million in accounts receivable and $5.65 million in inventory. Its bankruptcy petition placed both assets and liabilities in the broader range of $10 million to $50 million.
The schedules do not provide the company’s revenue, earnings, audited financial statements or the number of people it employs. They also do not identify specific Utah facilities, workers, suppliers or communities that could be affected by the case.
Rebel products have been identified in coverage as being sold by Walmart, Kroger, Safeway and other grocery retailers. The available records do not establish how the Chapter 11 filing will affect those retailers, product availability or customers.
What does Chapter 11 mean for the company?
Chapter 11 allows a business to continue operating while it develops a plan to address its debts. The process can lead to a negotiated repayment plan, a sale of assets or another court-approved restructuring. Creditors generally have an opportunity to review the debtor’s finances and object to proposed actions or a reorganization plan.
Rebel’s filing does not by itself establish that the Van Leeuwen judgment was the sole reason for the bankruptcy. The records show that the judgment makes up most of the listed unsecured liabilities, but they do not provide a complete explanation of the company’s financial difficulties.
The bankruptcy court will oversee the case, while the federal appeal will address Rebel’s challenge to the trade-dress ruling. The available information does not identify a trustee, Rebel’s bankruptcy counsel, the case number or the company’s operating plans after the filing.
