In court filings, Jolt said it agreed to buy 90 million 23.5oz resealable cans from Rexam between January 2007 and December 2009. However, because of the recession, the company has been able to buy just 27 million cans.
Jolt said it has to launch a non-resealable can to compete in the market, as the resealable cans supplied by Rexam cost three times the price of non-resealable cans.
The company added that it is unlikely to secure additional capital to pursue this strategy because of Rexam’s claims and asserted liabilities.
In its Chapter 11 filing, Jolt – which does business as Wet Planet Beverages – listed assets and debt in the range of $1m to $10m. Rexam, which is owed about $2.1m, was named as the largest unsecured creditor.
Jolt Cola was created in 1985 by CJ Rapp as a highly caffeinated drink and is sold across the US, Canada and Europe.
Shortly after its launch, the drink was featured on The David Letterman Show and in the pages of USA Today, calling the beverage a ‘pioneer’ and an ‘icon for energy-filled lifestyles’.
The energy drink has faced increasing competition and has lost ground to newcomers such as Rockstar (which partnered with PepsiCo) and Monster (which partnered with Coca-Cola), and the economic downturn left it struggling against competitors that were financially stable enough to reduce their prices.
The company hopes to sell itself through a court-supervised auction.
Sources: Reuters, The Wall Street Journal
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