The Ontario-based company filed a Notice of Intention to Make a Proposal (“NOI”) pursuant to Canada’s Bankruptcy and Insolvency Act (“BIA”) on Sept. 5, 2025. The bankruptcy covers Iovate Health Sciences International Inc., Iovate Health Sciences U.S.A. Inc. and Northern Innovations Holding Corp.
According to KSV Restructuring Inc., which is acting as proposal trustee, while the NOI is pursuant to the BIA, it is important to note that Iovate is not bankrupt.
“The NOI filing is intended to provide the companies with the stability and breathing room to advance a restructuring plan that is in the best interests of its stakeholders and allow the businesses to continue in the long term,” KSV shared.
Because of its U.S. affiliate (Iovate Health Sciences U.S.A. Inc.), the company also filed for Chapter 15 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York on Sept. 9.
Chapter 15 allows for the U.S. bankruptcy court to recognize the foreign (Canadian) proceedings, explained Erin Edelman, partner and leader of Armstrong Teasdale’s restructuring, insolvency and bankruptcy practice.
The U.S. court granted provisional relief, temporarily halting creditor actions and allowing the company to stabilize operations and pursue cross-border restructuring of the debt, she said.
“This restructuring paves the way for us to execute on an aggressive growth strategy rooted heavily in product innovation and development—growing our product portfolio, developing new offerings, and expanding retailer partnerships," Wes Parris, CEO of Iovate, told NutraIngredients. “Going forward, we will remain committed to customers, suppliers and partners while our day-to-day business continues without interruption.”
Lawsuit triggers proceedings
The main trigger for the Canadian insolvency proceeding, according to a memorandum opinion granting the motion for relief in New York, was a lawsuit filed by California-based Orgain against Iovate International and Iovate USA in U.S. and Canadian courts.
In April 2024, a court in California ruled in favor of Orgain’s claim alleging that Iovate had copied Orgain’s distinctive green containers. The court awarded Orgain US$ 10,035,481, but a subsequent disagreement led to Orgain returning to court to enforce the settlement. The court again agreed with Orgain and increased the judgement to US$ 12.5 million.
Orgain obtained legal permission to garnish about US$ 8 million from Walmart, a major customer of Iovate. This money was vital for Iovate’s cash flow, and the company subsequently defaulted on a major secured loan with the Royal Bank of Canada in June 2024.
Consultant: ‘Iovate must restore belief in its brands and strategy’
Commenting on the news, Joshua Schall from J. Schall Consulting, said that Iovate was one of the most powerful supplement brand portfolios in the gatekeeper era, controlling attention within print magazines and driving huge commercial activity inside specialty supplement retailers.
“Yet, especially over the last 10 to 15 years, barriers to entry across the supplement industry lowered astronomically…wrecking legacy power dynamics and causing massive competitive proliferation," Schall said.
“Also, imagine this huge pot melding together heightened macro shifts across varied demand drivers and quickened consumer behavior cycles around desirability of key dimensions impacting the supplement industry. Though, it’s the resulting overall mainstreaming effect and intense market expansion that has caused chaos for legacy companies.”
He emphasized that, regardless of the outcome of the bankruptcy proceedings, Iovate must restore confidence in its brands and strategy—“acting boldly to defend what has been slipping away, but more importantly, rebuilding relevance with consumers and retail partners.”
“Evolution will require the courage to challenge old assumptions, trust new systems and lead decisively,” Schall added. “This is not a time to wait for clarity. It’s time to create it.”
