Bank forcloses on Muscle Master leaving $8M in unpaid debt


Bank forcloses on Muscle Master leaving $8M in unpaid debt
by Anthony Robert

The end of the road is here for Muscle Master, after years of FDA letters, recalls, and poor business decisions, they’ve been forced into forclosure. In the months leading up to their financial downfall, they were still making orders from various manufacturers, having product shipped and manufactured, asking for lines of credit, and conducting themselves in a manner that leaves only two realistic possibilities:

* They didn’t realize they were not earning a profit
* They always to rip their suppliers off and run

Muscle Master was owned by Nick Chunias, a man who is also a certified public accountant – so the former looks highly unlikely, while the latter is accepted by every creditor I’ve spoken to. When EAS/Abott Nutrition filed a lawsuit against Muscle Master, it was determined that the company has no assets and nothing liquid; in short, a company that was selling millions of dollars of product a couple of years ago, now has nothing…while the fat-cat owner of the company is still rich. (Note: I mean this literally…Nick Chunias is a fat @ss).

Given his company’s history of deceit and lies, I can’t believe that this forclosure and bankrupcy was not intentional, and a result of financial wrangling behind the scenes, engineered to help Chunias run away with cash from companies that trusted him.

A lot of good companies got ripped off by this guy…and he’ll probably walk away as a millionaire while his accountant continues to shield him, his creditors continue to pursue him, and his employees continue to hate him.

The bank who loaned him $4.9 million will get about a quarter of it back, while it appears that most other creditors will get little to nothing.

A Northboro company that sold sports nutrition and dietary supplements online has gone belly up, leaving more than $8 million in unpaid debt.

First Trade Union Bank foreclosed on MuscleMaster.com Inc. to collect on a $4.9 million loan, but stands to recoup only about $1.25 million from the sale of assets and inventory, according to Joseph Finn Jr.

The Wellesley CPA, who does management consulting for distressed companies, was hired by MuscleMaster just before the bank swooped in.

MuscleMaster’s unsecured creditors owed $4.5 million — several of which filed an involuntary bankruptcy case against the company on Monday — are likely out of luck.

A Worcester Superior Court-appointed receiver, appointed in a lawsuit filed by Abbott Nutrition against MuscleMaster, reported last week that MuscleMaster has virtually no assets to satisfy any claims.

The 13-year-old MuscleMaster took in $30 million annually in its best year, according to Finn, but ran into trouble due to product recalls. Last January, MuscleMaster recalled 17 body-building dietary supplements that the U.S. Food and Drug Administration believed contained dangerous steroids. The FDA fined MuscleMaster $500,000, Finn said, but an agency spokeswoman said she could not confirm that.

MuscleMaster owners Robert Myhal and Nicholas Chunias could not be reached for comment.

Matthew Rosenberg, a Missouri attorney representing a MuscleMaster distributor that filed the involuntary bankruptcy case, said unsecured creditors were notified of the company’s sale after the fact.

“All the unsecured creditors received form letters saying MuscleMaster was unable to pay its bills, and they tried to save the company but couldn’t,” he said.

In 2004, federal agents raided MuscleMaster, seizing more than 900 bottles of dietary supplements containing the now-banned ephedra. The company was accused of making unsubstantiated claims that the products enhanced athletic and muscle performance.

source

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