Ecoquest Bankrupt — What Can Reps Do?
February 15th, 2010 by Jim Chao
Phoenix EQ Holding Co. Inc., also referred to as EcoQuest Holding Corporation Inc., the organization that held Eco Quest International, submitted a Chapter 11 bankruptcy petition about eight weeks ago.
Chapter 11 of the USA Bankruptcy Code does not talk about an activity of liquidation of the business, but rather permits reorganization according the United States bankruptcy law. This happens in order that the debtor company is able to propose a program with a view to reorganizing the company that will keep it going and even pay creditors after some time. The gathering of creditors also took place in December, and apparently, the company has over $4 million in unsecured claims against it from its major creditors and only \”$0-$ 50,000\” in assets.
Between 2000 – 2009, EcoQuest was a big manufacturer and marketer of air and water purifiers, located in Greeneville. The products were sold via a network system that comprised tens of thousands of independent distributors. This network appears to have included the United States and a number of countries from Europe, Asia and Australia.
The company recorded a significant growth, developing new products and employing in the area more than 700 people while it was at its peak, several years ago. It had more than $50 million in gross income both in 2007 and in 2008. As stated by its president, CEO and majority stock owner, Mike Jackson, it used to have a distribution network of around 100,000 active distributors.
However, sales profits decreased sharply following the onset of the economical recession and, after unsuccessful attempts to get third-party funding, in March 2009, a huge percentage of the assets of EcoQuest was sold to a subsidiary of Aerus Holdings LLC. Mike Jackson stated at the time, referring to his decision to sell EcoQuest, \“I had nowhere else to turn.\” (as cited by the The Greeneville Sun).
At present, Phoenix EQ Holding Company is the defendant in several lawsuits started by creditors all over the country. This is definitely an unhappy case of a successful business transforming overnight into a nightmare, for all of the people in it — management, producing work force (which was decreased to 200 people) and, yes, distributors. Some of them may have an extra business, but I suppose that most were mostly dedicated to EcoQuest. This story involved tremendous money loss for everybody.
What can you do, as a distributor, to prevent this decline from happening to you once again? The single certain strategy is not to let your carrier as an online marketer along with your earnings as well, be based on one organization only. Companies prosper and then fall suddenly, and you will be left with nothing. Your career and income should be determined by yourself totally, and on the image you have succeeded in creating for yourself. If you have managed to promote yourself as a marketer over the years, instead of marketing the company and its product, then you will experience no decline, as the people you\‘ve enrolled and led will not scatter when a business has failed; instead, they will go along with you to any good business opportunity you lead them to, as they rely on your know-how and experience.
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