Until the ban on ephedra came into effect in April 2004, Metabolife had the reputation as one of the largest dietary supplement manufacturers in the US, largely due to sales of its ephedra product Metabolife 365.
But the FDA's final judgment that ephedra constitutes an unreasonable risk of illness or injury brought lawsuits raining down on the company, including the indictment of former chief executive Michael Ellis over "fictitious and fraudulent representations" to the FDA about the safety of Metabolife 365 and "corruptly endeavoring to influence, obstruct and impede proceedings" in relation to the ban.
The company has also paid out damages to individuals who suffered serious ill effects from taking the supplement, including $2.4 million to Texan Rhea McAllister and $5 million in punitive damages. A Crosby woman who suffered a stroke resulting in brain damage after taking ephedra also received a $7.4 million jury award.
The company said in a statement that it spent "inordinately large resources and time to defending lawsuits filed by ephedra product users, which costs have been a substantial burden on the company's operations".
These costs, together with uncertainty over lawsuits still unresolved, meant that filing for bankruptcy was seen to be a "prompt, fair and cost effective" way to resolving outstanding claims and maximizing the value of its assets through the bankruptcy sale process.
Metabolife had successfully turned over its portfolio to non-ephedra products by December 2003, its core brands being Metabolife Ultra, Metabolife Complete, Metabolife Ultra Caffeine Free and Metabolife Green Tea Formula.
Following the bankruptcy announcement, health and wellness company Ideasphere (ISI) put in a $23 million bid for these brands, a powder and tablet manufacturing facility in Orem, Utah, and a distribution center in Memphis.
The sale is subject to competitive bidding at a public auction, proposed for September 2005.
ISI has said that if its acquisition goes ahead the products will still be marketed under the Metabolife brand, as a separate division of the parent company.
Mark Fox, president of ISI, said that the Metabolife assets would give the company an international platform from which to expand sales of its entire product line up on a global scale. The company plans to enter the Asian market later this year.
In April this year a Utah court ruled that the FDA had failed to meet its burden of proof that a daily dose of 10 mg or less of ephedrine alkaloids presents an unreasonable risk of illness or injury. The FDA plans to appeal against the ruling, which did not relate to higher doses of ephedra such as that of Metabolife 365.