NPA files for bankruptcy, citing losses, burdensome arbitration award

By Hank Schultz

- Last updated on GMT

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Getty Images
The Natural Products Association, the oldest trade organization in the dietary supplement industry, filed for Chapter 11 bankruptcy protection yesterday, according to an NPA statement.

NPA had suffered through six straight years of losses, according to a Reuters news report on the filing.  Dan Fabricant, PhD, NPA’s president and CEO, took over the reins of NPA in April 2014​.

Weickert lawsuit

NPA cited the ongoing lawsuit with former chief financial officer Brent Weickert as part of the reason the organization was in financial straits. In a bombastic lawsuit filed in late 2015, Weickert charged NPA and Fabricant with creating a hostile workplace and with wrongful termination​.  Weickert alleged that he was terminated when he tried to bring his concerns to NPA’s board of directors​ about how Fabricant was running the NPA office.

According to the Reuters report on the bankruptcy petition, Weickert holds the largest claim against NPA, a disputed $780,179 arbitration award.

NPA said in a statement released yesterday that the organization intends to continue to serve its membership though the bankruptcy process and thereafter.

“The filing is expected to have no impact on day to day operations and the important work the NPA pursues on behalf of its over 1,000 members.  We are proud to be the oldest and largest non-profit dedicated to the natural products industry and it will be business as usual as we proceed through the financial restructuring, with no changes to our activities, initiatives or interaction with members and government officials,”​ the statement said.

"NPA had a successful first day in court and is looking forward to moving quickly through the financial restructuring process.  Going forward it will be business as usual as we focus on the needs of our members and advocating for the interests of the Natural Products sector,"​ the organization added in an additional statement later in the day.

Lawsuit against board members

In connection with the Weickert lawsuit NPA sued 10 current and former board members​ with whom Weickert had communicated about his concerns about Fabricant. 

NPA sued the 10 board members (only four of whom were still in office when the suit was filed in early 2016), alleging that having private conversations with Weickert was “undermining NPA’s mission.”

In that filing, NPA claimed that under Fabricant’s leadership membership had rebounded and the organization had filed comments on federal legislation more frequently than other industry trade organizations. The lawsuit also claimed that despite Weickert’s claims of financial impropriety, Fabricant had put NPA on a more secure financial footing, in part by reforming the dues structure and rebuilding the membership, with the addition of 350 new members since April 2014.

NPA’s suit against the board members further stated that Fabricant had taken Weickert to task over Weickert’s job performance in early 2015 and told him at that time he should prepare to transition out of NPA. Shortly thereafter the suit alleged that Weickert began to conspire with the 10 board members in an attempt to have Fabricant removed.

Weickert declined to comment on the bankruptcy news.

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