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Thursday, Dec 29, 2011

XyienceSucks.com Calls Out Supplement Company, UFC Owners’ “Loan-To-Own Scheme”

XyienceSucks.com Founder Rich Bergeron (left) with MMA legend Bas Rutten

By Joshua Molina

A man at the center of a legal dispute with Xyience has been campaigning against the nutritional supplement company with a protest Web site, XyienceSucks.com.

Rich Bergeron, the founder of XyienceSucks.com and owner of Fight News Unlimited, discusses in lengthy detail, the story about how he was sued for $25 million by Xyience in July 2007, for making false claims about a Securities Exchange Commission (SEC) investigation into the company.

Bergeron stated that an investment in Xyience made by John Orrechio, a principal at a company called AA Capital was, in fact, the subject of the SEC investigation at the time.

“Essentially, they said I caused them to lose $25 million in potential investments due to my reports,” said Bergeron, who explained that he supported claims in his reports with quotes from sources that refused to be named.

Bergeron, who is not a professional attorney, is representing himself in the now four-year-old lawsuit.  He said his original concern was for shareholders whom he felt were being led to slaughter by Xyience Founder Russell Pike, a two-time convicted felon, who had raised millions of dollars from Midwest labor unions and other investors to launch the company.

Bergeron said he felt Pike, who was later accused of fraud by some of his investors, wasn’t “in any position to lead the company to an IPO” because of his criminal past.

Bergeron later wrote about how “the Fertittas (brothers Lorenzo and Frank, owners of Zuffa, LLC, the parent company of the UFC) took over the company through a sophisticated loan-to-own scheme.”

Launched in Las Vegas, also the home of the UFC, in 2004, Xyience is a familiar mixed martial arts brand.  UFC legend Chuck Liddell was the first major star to sign an endorsement deal with the company– back when MMA and the UFC hit it big after the first season of The Ultimate Fighter on Spike TV in 2005.

The Fertitta brothers, who own a majority of the UFC, also now own Xyience, a sponsor of the UFC.

“What other sport allows the owner of a league to own the company that sponsors that league?” Bergeron told Full Contact Fighter.  “Xyience sponsorships are used to brand company fighters, and guys sponsored by Xyience don’t get cut.

“They put a guy like Dan Hardy on countless Fruit Punch Xenergy cans, continued Bergeron, “and it says UFC right on the can. Now they simply can’t throw him out of the league, or it’s akin to false advertising. The same goes for Wanderlei Silva, who probably would have been forced into retirement a long time ago if it wasn’t for Xyience sponsoring him.”

Bergeron said he started the site because he was sued for $25 million for “writing the truth about the corrupt behavior going on at the company.”

Bergeron said that, once he was hit by the lawsuit, he was forced to become his own lawyer overnight. In the process of his research, he discovered a site called “Taubmansucks.com,” created by a man in response to Taubman, a major retail company that sued him over a trademark dispute.

“This site introduced me to the concept of a “gripe site” and the protections the First Amendment affords such platforms for protest,” Bergeron said. “Basically, that kind of site has to imply that it has nothing to do with the actual company. Putting sucks in the title of the dot com does the job.”

The case against him began in March of 2007 and is moving forward in Las Vegas Bankruptcy Court.

Bergeron, who has countersued for $150 million, said that working as his own lawyer has, in some ways, been beneficial.

“The mere fact that Xyience was willing to sue me for $25 million, helped generate a ton of controversy on its own,” Bergeron said. “Knowing I had to prove the facts in the court of public opinion as well as a court of law carried me this far and kept me in the game.”

He estimates that he has probably only spent about $6,000 on legal fees.

“Most of that’s been reimbursed by shareholders and creditors who want me to succeed,” Bergeron said.

Some four years after Bergeron began reporting his discoveries about Xyience, U.S. Bankruptcy Judge Lloyd King, on Oct. 28, ordered sanctions against Fertitta Enterprises, stating that the company’s Chief Financial Officer, William Bullard, failed to comply with requests for documents related to Xyience’s bankruptcy.

Stay tuned for Full Contact Fighter’s follow up report regarding the latest in the Xyience bankruptcy case.

posted by FCF Staff @ 10:51 pm
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