Before I toss out some questions, there has been some additional information brought to light about the Arbonne Bankruptcy.

First, the company was over $800 million in debt not the $500 million that was originally reported.

Second, if Arbonne comes out of this (many companies do not), they will still be strapped with another $120 million in debt and be owned 85% by the banks that are carrying that debt.

Third, Arbonne borrowed another $20 million more as part of this deal.

Frankly, I am much less concerned about how Arbonne comes out of this and a lot more concerned with how this whole thing is going to impact the individual Arbonne consultant. With that in mind…

What do you say to a potential consultant who is sitting across from you at a coffee shop listening to you tell the Arbonne story about the bankruptcy?  

We now know that 2007 – 2009 were not good for Arbonne with the company losing a net of 120,000 to 250,000 consultants each year.  I keep hearing things like "this is really good for us" and it is "a better time than ever".  Really? We add bankruptcy on top of an already massively bleeding (in terms of losing consultants) company and the words that are coming out of the leaders mouths are "this is awesome"?

Why is Arbonne borrowing another $20 million?  That might be the scariest thing of all.  The talk has been that cash flow is not an issue, yet the company is borrowing another $20 million. A study I found showed that 32% of companies that file Chapter 11, file again within 4 years, especially when they emerge from bankruptcy with too much debt.

Further, the study suggests that "pre-packaged" Chapter 11 filings usually work to fix the capital structure of the distressed company and largely overlook the strategic and operating shortcomings. 

I’ll leave you with this…

What does your business look like today?  Be honest. Not what you dream it will look like and not what it looked like in 2005-2006. Today.

Do you believe that Arbonne’s bankruptcy will help get your business where you want it to be?