Plaintiff In Herbalife Ltd. Case Wants To Add More

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Plaintiff In Herbalife Ltd. Case Wants To Add More

Lawyers for former Herbalife Ltd. (NYSE:HLF) Dana Bostick have filed a new motion in his case against the multi-level marketing company. He sued Herbalife on allegations that it is a pyramid scheme. During the mediation process, Herbalife expressed concerns about whether Bostick had skills that were adequate to allow him to succeed at being a distributor of its products.

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Herbalife refuses to settle

Michelle Celarier of the New York Post reports that court papers show Bostick and Herbalife Ltd. (NYSE:HLF) spent 50 hours in mediation but failed to come to a settlement. Now Bostick wants to add four more plaintiffs with different backgrounds who all said they lost money by trying to distribute Herbalife products.

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Anita Vasko said she lost $12,000 last year after joining one of Herbalife Ltd. (NYSE:HLF)’s nutrition clubs. She said she worked six or seven days every week trying to be successful. Judy Trotter said she ended up $10,000 in debt before she gave up on it in 2012. Beverly Molnar said she was $11,000 in debt after buying leads to try to get her business off the ground. And Chester Cote said he tried to sell the company’s products online in 2009 but was unable to do so because so many other distributors were trying to get rid of their products at deep discounts.

A hearing on whether Bostick will be able to add these four people to his case is scheduled for June 30. If the plaintiffs want to seek class action status, the deadline is Aug. 25.

Ackman keeps chipping away at Herbalife

Meanwhile Bill Ackman continues to try to discredit Herbalife Ltd. (NYSE:HLF). Parallels between Herbalife and a company called BurnLounge have been drawn, leaving the shorts suggesting that Herbalife could face an FTC case just like BurnLounge.

However, the Herbalife Ltd. (NYSE:HLF) longs are also claiming victory in the recent ruling in the FTC’s case against BurnLounge as a victory—even though the court ruled that BurnLounge is indeed a pyramid scheme. They see it as a victory because so many of Herbalife’s distributors join for the sole purpose of getting discounts on the company’s products and using them themselves. This week’s court ruling says consumption by a company’s distributors counts toward the measure of demand for its product—something that goes against what Ackman has been saying all along.

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Michelle Jones is editor-in-chief for ValueWalk.com and has been with the site since 2012. Previously, she was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Email her at Mjones@valuewalk.com.
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3 COMMENTS

  1. I would much rather be a “failed” (ripped off) Amway distributor is a “successful” (ripping off) Amway distributor. LOL

    Where did I say I was above the law? All I was doing was restating what the law and the judge stated. LOL

    A lot of people “bet” against Ackman in the MBIA case as well. LOL

  2. Do NOT forget Tex2 is a failed Amway distributor and thinks he is above the law. Now claiming to know more the the ninth circuit court decision.
    Ichan. Soros, Stiritz, Fidelity, Perry, et al, all are betting Ackman is wrong.

  3. “This week’s court ruling says consumption by a company’s distributors counts toward the measure of demand for its product—something that goes against what Ackman has been saying all along.”

    Wrong. The court said distributors can be paid for internal consumption, but the MLM must ALSO have adequate retail sales to customers, i.e., non-distributors. The term “adequate” was not defined, because the court was only ruling on the issues before it with the appeal, and the customer sales level was so low that the court didn’t have a need to define it.

    HLF operates very similar to Amway, the world’s smallest MLM scam: http://www.stoptheamwaytoolscam.wordpress.com

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