‘Smiling Bob’ to be sold for $2.75m

By Shane Starling

- Last updated on GMT

Related tags Dietary supplements industry Bankruptcy

Berkeley Premium Nutraceuticals – the Cincinnati-based manufacturer of the herbal, male sexual enhancement product infamously promoted by a character named Smiling Bob – is to be sold.

Bankruptcy trustee, Richard Nelson, said Berkeley had signed an asset purchase agreement with the Ohio-based buyer that included all of Berkeley’s herbal supplements brands including Enzyte, the product that brought Smiling Bob to the attentions of late night television audiences across America.

The buyer is offering $2.75m for the company that went bankrupt in August after its founder Steve Warshak was jailed for 25 years on 93 counts of conspiracy, fraud and money laundering, along with a number of his associates and his mother, who was handed a suspended sentence.

Charges included lying to its banks, concealing profits and misleading customers with false products claims.

Berkely has continued to trade since being hit by the catastrophe but owes the US government $474m, and the new buyer indicated he would keep the business as a going concern along with its 200 employees.

“If this buyer ends up being the successful buyer, there is no anticipated loss of jobs,”​ Nelson said, in press reports. He said there were also other parties interested in buying the company.

Under relevant bankruptcy law, the new buyer would not be liable to pay the $474m owed, rather the money from the sale would be divided between Berkeley’s creditors.

District Judge S. Arthur Spiegel was asked by Nelson to extend the November 25 deadline for paying the forfeiture penalty to at least January 31 to facilitate the passage of the sale.

Berkeley’s range consists of about a dozen herbal supplements that claim to boost energy and memory, manage weight and assist sleep.

The male enhancement product, Enzyte, includes the ingredients Korean red ginseng, ginkgo biloba, zinc, and octacosanol.

Historic

At the time of the conviction in August, veteran Colorado-based food-industry lawyer, James R Prochnow, of the firm Greenberg Traurig, called the verdict historic in its severity and said it sent a clear message to the dietary supplements industry that misleading claims could result in harsh penalties.

“This is the most significant decision in the history of the dietary supplements industry,”​ he told NutraIngredients-USA.com. “It is a substantial departure from previous sentencing and sends a clear message to industry that transgressions of this nature will be harshly dealt with.”

NutraIngredients-USA.com readers vindicated in a subsequent survey of opinion.

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