Arbonne has officially filed for Chapter 11 Bankruptcy protection in Delaware.  Here is the court information:

Natural Products Group LLC, U.S. Bankruptcy Court, District of Delaware, No. 10-10239

The company was more than $800 million in dept while Arbonne distributors were telling their prospects that the company was debt free.

From Reuters:

The company plans to borrow up to $20 million to fund operations during its bankruptcy, known as a debtor-in-possession loan.

Lenders owed approximately $530 million will end up owning 85 percent of the reorganized company’s equity under the restructuring plan. They will also have a new term loan worth $125 million.

Lenders owed about $216 million under a separate loan will be allocated warrants that will allow them to purchase up to 5 percent of the equity in the reorganized company.

Harvest Partners LP, a New York private equity firm, owns the prebankruptcy equity in Natural Products Group and it will be wiped out.

Harvest formed Natural Products Group in 2004 to buy Arbonne International LLC, a direct marketer of personal care products, and Levlad Inc, which owns the Nature’s Gate line.

Harvest, with other investors, provided $93 million of equity for the acquisitions.

Natural Products Group, based in Irvine, California, said in court documents that it grew rapidly in 2005 and 2006 as Arbonne added a large number of direct marketing contractors, providing an unsustainable boost to revenue.

The company’s net sales began to fall in 2007-2009 due to a loss of direct marketers and downturn in the economy.