SensaSlim, the diet spray operator which has attracted the attention of the competition regulator and class action lawyers, has been placed into administration.
It has appointed John Kukulovski of Jirsch Sutherland as administrator and a meeting of creditors will be held next Monday, 11 July.
According to The Age, Kukulovski – who could not be contacted this morning – is expected to recommend to creditors that SensaSlim be liquidated, posing big questions about whether franchisees will get a return on money invested to sell the herbal product, which was promoted as being backed by medical research.
The report says a company spokesman blamed the collapse on the freezing of its bank accounts a couple of weeks ago.
The Federal Court in Sydney last month upheld a freeze on SensaSlim’s assets after allegations from the Australian and Competition and Consumer Commission that the company had misled and deceived consumers.
SensaSlim said at the time it had little money other than the frozen bank accounts and Justice Jacobsen said the court would quickly consider evidence on how much money the company needed to continue operating.
Listed law firm Slater & Gordon has flagged a multi-million dollar law suit against the company, saying it had been approached by around 70 franchisees, who had paid around $60,000 each for rights to sell the diet spray.
The franchisees’ lawyer, Van Moulis of Slater & Gordon, previously said the law firm was waiting for the ACCC decision before deciding whether it would file compensation claims on behalf of investors.
This morning an ACCC spokesman would make no comment on the administration or whether the watchdog was looking at compensation on behalf of franchisees, with more than 100 people believed to have signed up to sell the product.
SensaSlim products – promoted as clinically proven and 100% safe on its website – are still being sold in Australia.
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