Juul Labs Inc. is looking for a bailout to avoid bankruptcy, and the e-cigarette maker is turning to its powerful political friends, which include several Black Democrats and lobbyists.
According to a Wall Street Journal report, the company is in talks with two of its investors–Hyatt Hotels heir Nick Pritzker and California investor Riaz Valani– about a bailout that could help it avoid a bankruptcy filing.
Jull is asking Pritzker and Valani to put up money to cover the e-cigarette maker’s operations and near-term legal liabilities, a WSJ report said.
The e-cigarette company had to deal with a ban imposed by the U.S. Food and Drug Administration (FDA), which in June banned the sale of Juul’s e-cigarettes. The FDA order was later temporarily stayed, Reuters reported. The company is also facing thousands of lawsuits alleging that Juul marketed to children and teenagers.
In 2017, Juul skyrocketed to the top of the e-cigarette market, but now it has been searching for ways to avoid bankruptcy, but it has also been preparing for a potential chapter 11 filing and recently added two restructuring experts to its board, the Wall Street Journal reported.
Valani and Pritzker had been Juul’s largest shareholders before Altria Group Inc. bought a 35 percent stake in the company for $12.8 billion in 2018.
Facing mounting backlash and political obstacles, Juul reached out to Black Democrats and lobbyists, hiring lobbyists and consultants with ties to Black lawmakers. They also steered money to congressional Black and Hispanic caucuses, and to civil rights groups. In 2019, the has company tapped services of Ben Jealous, a former head of the NAACP, a board member of the Congressional Black Caucus’s political arm, and the Obama White House’s top civil rights liaison, according to The Fix.
Photo by Renz Macorol: https://www.pexels.com/photo/person-holding-black-vape-3545426/