Whipped Cream Difficulties

I thought this was a mildly interesting business story, mostly because it starts out in one direction and then goes in another.

Molekule Group has filed for Chapter 11 bankruptcy.

Molekule made (makes?) air purifiers. I remember a time when they advertised pretty heavily on some of the podcasts I listened to.

The claimed reason for bankruptcy seems to be wanting to get out of their office lease, because San Francisco.

Molekule started a seven-year lease spanning the entirety of the building in February 2019. The monthly base rent began at $209,231 with an annual 3% increase.
The bankruptcy petition alleges that the company abandoned its headquarters in May “out of concern for its employees’ safety” and attempted to negotiate with its landlord to terminate the lease.
“San Francisco’s homeless crisis created a dangerous environment around the SF Headquarters, especially in the area between the SF Headquarters and the nearest public transit stop,” Tyler stated in his declaration.

Except:

But three former Molekule employees who spoke on the condition of anonymity said the safety situation described in the filings was an exaggeration. Although there were issues with cleanliness around the office location, the former employees don’t remember safety being a primary concern while they worked there.

…

According to the former employees, the office was only intermittently used after March 2020, and far from dissuading workers because of safety concerns, Molekule attempted to draw people in by installing a pingpong table and touting the effectiveness of its products in keeping the office clean and safe.

…

One of the other factors in the company’s bankruptcy listed in its legal filing was a fractured partnership with Aura Smart Air, an Israeli air purifier company.
Aura’s failure to submit source code for a product known as Molekule 360 Hub led to the product’s suspension shortly after its launch and “severely impacted the Debtors’ revenue and growth strategy,” according to the bankruptcy filing.

What gets glossed over in the coverage: Molekule was a scam.

Wirecutter (back in the day when they were decent) called their products “Some of the worst air purifiers we’ve ever tested“. Molekule was forced to withdraw almost all of their advertising claims. Consumer Reports panned it.

How big a scam was it? Big enough that at least one of those podcasts went back and removed the ads, and any mention that Molekule was ever a sponsor, from their feed. There was at least one class action lawsuit which appears to have been settled.

So, yeah, at the very least, this looks like a dodge by a troubled company to get out of their lease by blaming San Francisco’s problems, not a legit example of the Bay Area’s ineffective government.

This entry was posted on Friday, October 6th, 2023 at 12:19 pm and is filed under California Über Alles, Law. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.