Several trucking and logistics firms are collectively owed hundreds of thousands of dollars after a Nevada-based bottled water company — currently under federal investigation over allegations that its water resulted in a nationwide hepatitis outbreak — went out of business.
AffinityLifestyles.com and its affiliates, Real Water Inc. and Real Water of Tennessee, filed for Chapter 7 bankruptcy on Aug. 20. The move comes two months after a federal court ordered the companies to stop producing or distributing bottled water and water concentrate under the brand names Re2al Water Drinking Water and Re2al Alkalized Water at its Mesa, Arizona, and Henderson facilities.
Among the companies’ top 20 unsecured credits are several trucking and logistics firms, including Chicago-based Echo Global Logistics, owed nearly $38,000, GlobalTranz of Phoenix, Arizona, owed more than $31,300 and XPO Logistics in Las Vegas, owed around $22,000.
In May, the Department of Justice filed suit against Real Water and executives, Brent A. Jones, a former Nevada lawmaker, and his son, Blain K. Jones, alleging a series of sanitation and labeling failures led to an outbreak of liver illnesses tied to the products.
FDA investigators claim Real Water personnel had not “properly cleaned and sanitized the water tanks in which they mix processed municipal tap water with E2 Concentrate, potentially leading to chemical and microbial contamination” at its two facilities, according to the lawsuit filed by the DOJ.
Real Water settled the suit with federal authorities in June.
“While the companies marketed their products as a healthy alternative to tap water, the government alleged that the products, in fact, consisted of municipal tap water that the defendants processed with various chemicals in violation of current good manufacturing practices, relevant food safety standards and hazard prevention measures,” according to court documents.
The DOJ filed the complaint after the FDA received reports that at least 16 adults and children experienced acute non-viral hepatitis after drinking Re2al Water. Court documents state that five children experienced acute liver failure after drinking the products.
At least 21 lawsuits have been filed against Real Water and its executives since the company issued a voluntary recall of all of its products in March. The FDA found that despite its products being linked to a nationwide hepatitis outbreak, Real Water products were still being sold online.
No funds for unsecured creditors
Managing entity AffinityLifestyles.com lists assets for its company as between $1 million and $10 million, liabilities as between $500,000 and $1 million and states that it has up to 99 creditors, according to its bankruptcy petition filed in the U.S. Bankruptcy Court for the District of Nevada.
Real Waters lists both its assets and liabilities as between $1 million and $10 million and has up to 199 creditors, according to court filings. Real Water of Tennessee states its assets are between $100,000 to $500,000 and its liabilities are between $500,000 to $1 million. It has up to 49 creditors.
Brent A. Jones, president and founder of the Re2al Water brands, stated in his petition that after administrative fees are paid, no funds will be available for unsecured creditors.
Matthew C. Zirzow, bankruptcy attorney for Real Water and its affiliates, did not respond to FreightWaves’ request seeking comment.
A creditors’ meeting for AffinityLifestyles.com and its affiliates is scheduled for Sept. 20 in Las Vegas.
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Click for more articles by Clarissa Hawes.