Power Balance pays out $57m as 'their bracelets do not help athletic performance as claimed'
Power Balance, the company that allegedly stretched the truth about the ability of its 'performance-enhancing' rubber bracelets, is reportedly on the verge of shutting down after shelling out $57 million to settle a lawsuit.
The California company counts some of the nation's top athletes among its converts.
The likes of New Orleans Saints quarterback Drew Brees, Los Angeles Lakers stars Kobe Bryant and Lamar Odom and NBA legend Shaquille O'Neal have been spotted wearing the silicone bands on their wrists.
Big league fans: Basketball greats Shaquille O'Neal (right) and Kobe Bryant are among the star athletes spotted wearing Power Balance bracelets
But company officials admitted in January they made bogus claims that the holograms in their bracelets, inspired by 'Eastern philosophy,' improved strength and balance.
Now, TMZ is reporting that the company has settled a class action lawsuit over the bracelets for $57.4 million. Citing anonymous sources, TMZ said Power Balance will declare bankruptcy and close up shop as a result of the legal action.
Power Balance denied TMZ's claims, telling the New York Daily News: 'The rumors started by TMZ are, of course, way off the mark. PB is not going out of business."
A spokesman also denied the $57 million settlement amount.
Instead, Power Balance said it made a $1 million settlement and filed for Chapter 11 bankruptcy protection.
Power Balance blasted onto the scene three years ago with major celebrity endorsements. The company has sold nearly 3 million bracelets at $30 a pop.
Trendy: The southern California company burst onto the scene three years ago, selling nearly 3 million bracelets for $30 a piece
In January, company officials issued a statement saying: 'We admit that there is no credible scientific evidence that supports our claims and therefore we engaged in misleading conduct'
'If you feel you have been misled by our promotions, we wish to unreservedly apologize and offer a full refund.'
A lawsuit against the company was also filed in January. It alleged Power Balance leaders knew their product did none of the things they said, but continued to repeat the claims anyway.
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