Feb. 20, 2020
By Lori Sharn
Consider joining CEO Update. Membership gives full access to the latest intelligence on association management, career advancement, compensation trends and networking events, as well as hundreds of listings for senior-level association jobs.
The Natural Products Association has ended its effort to declare bankruptcy after agreeing to pay a former employee $1.8 million to settle a claim against the association.
NPA asked the U.S. Bankruptcy Court for the District of Delaware to dismiss the Chapter 11 case the association filed in August 2019. The order was granted Feb. 19.
“This was a business decision, it was the right thing to do, and it is an exciting day for NPA because we emerge stronger and more competitive,” NPA CEO Daniel Fabricant said in a statement.
According to a declaration from Fabricant asking for the dismissal, NPA will have $1.6 million in reserve funds after paying the settlement to former Chief Financial Officer Brent Weickert. These reserves will be available to pay other debts of approximately $164,000. NPA’s total revenue in 2017 was $2.6 million, according to tax records.
NPA filed the bankruptcy case shortly after Weickert won a preliminary arbitration award of about $780,000, and while the arbitrator was still considering an award for punitive damages. Weickert had filed a lawsuit alleging that he was fired in 2015 for exposing wrongdoing by the CEO. NPA said he was properly terminated for budgetary and other reasons.
The final arbitration award was issued in November. Although the arbitration records have been sealed, Weickert filed a claim in the bankruptcy case for $3,170,050.
Under the Dec. 16 settlement, NPA’s insurance policy was to pay Weickert $1.235 million. The remaining $546,726 would be paid from NPA’s reserves.
“Accordingly, due in large part to the Settlement, the Debtor is now entirely solvent and capable of paying its pre-petition debt and fund operations going forward,” said the declaration from Fabricant. “Further, the Debtor has remained current on all post-petition obligations owed to its creditors, and, therefore, as President and CEO of the Debtor, I believe there will be no post-petition claims, either secured or unsecured, owed to creditors.”