FOR IMMEDIATE RELEASE
AUSTIN, TX (June 20, 2023) –Kettlebell Kings, a leading manufacturer and seller of kettlebells and fitness equipment, recently filed a multi-count lawsuit against both Factory 14 and Razor Group, alleging fraud, breach of contract, and unjust enrichment among eight counts. The lawsuit alleges that the founders of Kettlebell Kings and the company have been damaged by the failed purchase of Kettlebell Kings by FACTORY14 and Razor Group.
Kettlebell Kings, which has been in operation for more than a decade, successfully grew from a startup to generate annual revenue of more than $5 million in 2021. In November 2021, the founders agreed to be acquired by Factory 14, a United Kingdom-based company that claimed to have the vision and resources to help develop the brand into a $20 million company.
However, shortly after the acquisition, problems began to arise. According to the lawsuit, two of the founders, who continued to run the business under the new ownership, determined that the purchase terms of the agreement were regularly violated. They were unable to purchase inventory, even using their own sales revenue. Despite promising ambitious agreements and profit-sharing arrangements, the new ownership failed to adequately support the brand. To the founders’ surprise, Factory 14 had simultaneously engineered another transaction in which it was purchased by Razor Group, without disclosing this to the plaintiffs.
According to the legal complaint, the founders believe that this transaction was part of a pattern of acquisitions intended to bolster Factory 14’s financials solely for additional capital raises and investments. Factory 14 is alleged to have misrepresented the role of the founders of Kettlebell Kings in the sale to Razor Group and made false representations using their business reputation and success to enhance its value in the transaction. All the while, Factory 14 never disclosed its intention to depart from the agreements made with Kettlebell Kings.
The lawsuit states that as the business relationship deteriorated further with Razor Group, it became apparent that the new owners lacked experience in the direct consumer market and had no infrastructure to support Kettlebell Kings. Payments required by the consulting agreement were not made on time, inventory was not purchased, and the founders were denied crucial information about the business’s operation. Some payments remain unpaid. Razor Group’s actions damaged not only the founders of Kettlebell Kings but also the longstanding business relationships the company had developed.
According to the lawsuit, Razor Group ceased all inventory purchases, stopped paying manufacturers and vendors, and damaged customer relationships. The lawsuit also alleges that Razor Group misled both Kettlebell Kings and its investors by representing itself as profitable and successful while claiming Kettlebell Kings was struggling. The plaintiffs assert that Razor Group focused more on fundraising rather than effectively managing the businesses it owned.
On its website, Razor Group states that it is trusted by leading investors Blackrock, Victory Park Capital, and Fortress among others.
The eight-count lawsuit includes allegations of fraud, breach of contract, and unjust enrichment, among others. The plaintiffs argue that they have suffered irreparable damages, and the actions of Razor Group will make it nearly impossible for them to conduct business in the fitness industry in the future.
In another case, Razor Group GMBH is currently being sued for fraud and breach of contract in Massachusetts by fitness company Tribe WOD in a lawsuit with a similar fact pattern to the Kettlebell Kings Texas case.
The Kettlebell Kings lawsuit was filed in Texas by IL Ventures, LLC – a Kettlebell King Series and its founders Chad Price, Jay Perkins, and Nehemiah Heard against defendants Factory 14 UK Acquisition VI, Factory 14 UK Acquisition VII, and Razor Group GMBH. The lawsuit can be downloaded here and at LawsuitPressRelease.com.
Source: IL Ventures, LLC – a Kettlebell King Series
Contact: John P. David