SACRAMENTO (CBS13) -– The company behind the recently crowned Power Balance Pavilion has filed for bankruptcy, according to court papers.
The bankruptcy filing come after the company apparently agreed to a $57 million settlement over a class-action lawsuit that was filed in January.
The lawsuit claimed the company misled consumers to believe that the hologram-embedded bracelets and necklaces were scientifically proven to improve athletic performance.
After the lawsuit was filed, the company admitted there was no credible scientific evidence backing its claims and offered consumers refunds.
But now, TMZ.com is reporting a settlement worth $57.4 million has been reached with the company to compensate all who bought the bogus bands.
Despite the bankruptcy filing, the Sacramento Kings are standing by Power Balance calling them "good partners since day one."
The statement from the Kings went on to say "They (Power Balance) have assured us of their commitment to the Sacramento Kings and the surrounding community and we expect to continue our productive partnership through this process and into the future."
In the Chapter 11 bankruptcy papers, Power Balance claims to have assets of between $1 million and $10 million while having debts between $10 million and $50 million.
A list of creditors with the 20 largest claims against the company includes Kobe Bryant's company, the Los Angeles Kings NHL team and the Sacramento Kings.
According to the Power Balance website, the company was started back in 2006 by brothers Troy and Josh Rodarmel and within five years had sold millions of wristbands saying they have a "roster of hundreds of top professional athletes (and growing!) and millions of satisfied customers all over the world."
The company's website provides a list of pro athletes called the PB Team who wear Power Balance bracelets including Dustin Pedroia, Shaquille O'Neal and Drew Brees.
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