Utah ice cream company seeks bankruptcy protection after costly packaging lawsuit ruling.
Rebel Creamery, a Utah-based ice cream company known for its low carbohydrate products, has filed for Chapter 11 bankruptcy after taking on millions of dollars in debt. The company sells its ice cream at large retailers, including Walmart, Kroger, Safeway and Target. Court records show that Rebel Creamery listed between $10 million and $50 million in both assets and debts when it filed. The bankruptcy filing came less than a month after Rebel lost a legal fight with Van Leeuwen Ice Cream over the look of its product packaging. The resolution of that case had been pending for years and ended with a judge ordering Rebel to pay Van Leeuwen nearly $23.8 million.
Van Leeuwen filed the lawsuit against Rebel Creamery in 2021. The company said Rebel had copied parts of its packaging, including its soft colors and simple design. Van Leeuwen argued that the look of Rebel’s containers was close enough to its own branding that shoppers could become confused. A court case later focused on when and how Rebel’s packaging was created. Court records said a Van Leeuwen employee noticed similarities between the two brands sometime around early 2019. Rebel denied that its designers knew about Van Leeuwen’s packaging and said the look was created without knowledge of the other company’s branding.
Judge Eric Komitee did not accept that explanation. The judge ruled that Rebel had violated Van Leeuwen’s trademark rights and had done so intentionally. The ruling also required Rebel to stop selling the products with the disputed packaging and redesign the containers. The financial hit from the lawsuit was large. The $23.8 million order arrived at an already difficult time for Rebel, which had been carrying millions of dollars in debt prior to the decision. Rebel filed an appeal two days before entering Chapter 11 bankruptcy, a form of bankruptcy that allows companies a chance to reorganize their finances while continuing to operate under court protection. The filing does not necessarily mean a company will close its doors right away. Instead, the process can give a business time to deal with creditors, debts and other financial problems while it works on a plan for the future.
Rebel was founded in Utah back in 2017. The company built its business around ice cream marketed as low in carbs and, thus, keto-friendly, which is ideal for consumers with diabetes or those seeking an alternative to traditional ice cream for weight management. Its presence in major grocery chains gave the brand access to shoppers across the country. Van Leeuwen has a much longer history in the ice cream business. The company began in New York City in 2008 as an ice cream truck and later grew into a business with about 100 shops across the U.S.
The Chapter 11 case now puts the company’s debts, business operations and legal dispute under a new court process. The outcome could determine whether Rebel continues selling ice cream, changes its business structure or takes another path as it deals with the financial pressure created by the lawsuit and its existing debts.
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Popular ice cream brand sold at Walmart and Target files for bankruptcy
Ice cream company Rebel filed for Chapter 11 bankruptcy. Here’s why
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