The company filed its petition Friday in U.S. Bankruptcy Court in Utah. Rebel reported about $13.78 million in assets and $23.85 million in liabilities in bankruptcy schedules. Rival Van Leeuwen Ice Cream is listed as an unsecured creditor with a disputed $23.785 million claim under appeal.
Rebel denied infringement and maintained its founders had not seen Van Leeuwen's packaging while creating their design. The court rejected that account after a bench trial and found evidence of confusion among consumers and in the grocery industry.
Van Leeuwen sought about $36.4 million in Rebel's profits. Komitee reduced the award, finding that some purchases stemmed from demand for keto and other better-for-you products rather than packaging. "Van Leeuwen is entitled to a profits award of $23,785,000," the judge wrote.
The ruling also bars Rebel from selling products with packaging likely to be confused with Van Leeuwen's and requires a redesign. Rebel filed a notice of appeal challenging the judgment on Aug. 12, days before seeking Chapter 11 protection, according to the federal court docket.
Chapter 11 bankruptcy allows companies to continue operating while developing a plan to restructure debt. Rebel has not announced plans to shut down, cease production, or remove products from store shelves.
"Along with millions of others, we discovered that eating foods high in animal fats and very low in carbs/sugar trains your body to burn fat instead of sugar as an energy source," Rebel's website states.
According to the company, Rebel tested its low-carb ice cream through a 2017 Kickstarter campaign, raising $80,000 before expanding into thousands of stores.