Vi-Jon, LLC filed a voluntary Chapter 11 petition in the United States Bankruptcy Court for the District of Delaware on August 2, 2026, and it filed with the deal already in hand. Three days earlier, the debtor executed a restructuring support agreement with its non-debtor parent and affiliates, a prepetition future claimants’ representative, and the plaintiffs’ firms whose clients hold the overwhelming majority of the talc personal injury claims asserted against it.

The agreement contemplates a plan that channels every current and future talc claim into a trust established under section 524(g) of the Bankruptcy Code. The trust would be funded by a guaranteed $25 million cash contribution from non-debtor affiliates, together with assigned insurance rights, a $1 million promissory note from the reorganized debtor, net proceeds of a real estate sale, assigned causes of action, and a contingent settlement fee tied to a future sale of the corporate parent. In exchange, the channeling injunction and related releases would extend beyond the debtor to the non-debtor affiliates and their related parties.

There is no debtor in possession financing. The debtor entered the case with approximately $1,650,000 in cash on hand and intends to fund administration through an amended prepetition keepwell arrangement with its affiliate, under which roughly $8.1 million in undrawn capital commitments would be advanced once the interim cash management order is entered.

The schedule the parties agreed to is aggressive. A plan and disclosure statement are due 30 days after the petition date, disclosure statement approval at 70 days, solicitation at 75 days, confirmation at 110 days, and consummation at 120 days. The restructuring support agreement terminates automatically nine months after execution if the effective date has not occurred.

Case at a Glance

The most useful thing to understand about Vi-Jon is the mismatch between the size of the business and the size of the liability it carries. This is a private-label dry bath products company selling Epsom salts and body powder to retailers including Amazon, Dollar General, Kroger, TopCo, and Walgreens. Total net sales were approximately $26 million in 2025, with approximately $21 million expected in 2026. Adjusted EBITDA was approximately $700,000 in 2025, expected to fall to approximately $300,000 in 2026.

As of the petition date, the debtor had one full-time salaried employee, a vice president and general manager, and one independent contractor providing litigation support.

Everything else is outsourced to affiliates. Manufacturing runs through a co-manufacturing agreement, and management, human resources, finance, information technology, legal compliance, risk management, insurance, employee benefits, and tax services run through two administrative services agreements. The debtor owns a single non-operational manufacturing plant in St. Louis, referred to in the filings as the Etzel Property, which is slated for sale with the net proceeds contributed to the trust.

Customer concentration is high. The two largest customers accounted for nearly 50% of net sales in both 2024 and 2025. Epsom salt products represent roughly 65% of total annual net sales.

Corporate History

The company traces to 1908 as the Peroxide Specialty Company, rebranding as Vi-Jon Laboratories Inc. in 1933 and expanding into private-label cosmetic and personal care products in the 1960s. In 2006, Berkshire Partners LLC acquired a controlling interest and Vi-Jon Laboratories merged with Cumberland Swan Holdings, Inc. That merger matters for insurance purposes, because it brought with it rights under policies Cumberland Swan purchased from July 31, 1999 through July 31, 2006. In 2020, Berkshire consummated the ESOP Transactions, making the enterprise 100% employee-owned, and Vi-Jon, Inc. became Vi-Jon, LLC.

The declaration identifies a single primary driver of the filing, and it is not operational. Claims filed against the debtor increased by approximately 400% since 2023, driven largely by plaintiffs’ counsel adding the debtor to pre-existing cases in which it had not initially been named. Twenty-eight law firms filed talc-related claims against the debtor for the first time following the 2023 liability forecast. At the same time, average settlement costs increased substantially and dismissal rates decreased substantially.

Then two verdicts landed within eight weeks of each other. On May 15, 2026, a jury returned a $10.2 million verdict in Heyer v. A.H. Bennett Co., with 20% apportioned to the debtor and subject to certain setoffs. On July 7, 2026, judgment was entered against the debtor in Ludwig v. Sumitomo Corp. of Americas in the amount of $16,750,487. The $10.2 million figure is the full Heyer verdict rather than the debtor’s share, but the declaration nonetheless lists approximately $20 million of litigation judgments from these two matters among the debtor’s unsecured obligations. That is the exposure carried by a company projecting approximately $300,000 of adjusted EBITDA.

The commercial picture deteriorated alongside the litigation. The debtor lost a significant portion of its body powder business in October 2025. Quarterly body powder net sales had run at approximately $2.4 million during 2024 and 2025 and fell to approximately $662,000 in the first quarter of 2026.

What makes the claim volume notable is that the underlying conduct stopped a decade ago. The debtor permanently discontinued production and sale of talc products in 2016, having temporarily discontinued sales between 1995 and August 1999. Its average market share for talc products between 1975 and 2015 was 13.2%, with peak sales of approximately 20 million units in 2003. The debtor disputes all talc-related liabilities and maintains that its talc products were safe.

You cannot read this case without understanding the transaction that shaped it. In late 2023, the enterprise separated the dry goods business from everything else it owned, and the exhibits filed with the declaration lay out the mechanics in four phases.

In the refinancing phase, Vi-Jon formed VH Finance, LLC and Vivos Holdings, LLC. Vivos entered a new financing arrangement, distributed the proceeds up the chain to Vi-Jon, and Vi-Jon repaid its existing lenders. In the post-refinancing distribution phase, Vi-Jon contributed the equity of VH Finance to an intermediary holding company and then contributed substantially all of its assets to Vivos, retaining only the dry goods business. In the asset transfer phase, Vi-Jon distributed the equity of Vivos to VH Finance, and Vivos formed UpLift Brands, LLC, Consumer Product Partners, LLC, and INSPR Labs, LLC, moving branded inventory and intellectual property to the first and the remaining assets to the second. In the pre-reorganization phase, Vi-Jon Holding, Inc. became Emprise Group, Inc. and the intermediary holding company became Emprise HPC, LLC.

What remained at Vi-Jon was the Epsom salts and body powder business, the Etzel Property, and the talc liability. What backstopped it was the Keepwell Agreement, executed December 28, 2023, under which Emprise HPC committed to provide up to $25 million in equity contributions.

The 2023 transaction is also why the funded debt in this enterprise sits outside the debtor. The current organizational chart identifies Emprise Group as borrower or issuer under a prepetition asset-based lending facility and a first lien facility, with Emprise HPC as guarantor, and Emprise HPC as borrower under a second lien facility with Emprise Group as guarantor. Vi-Jon itself has no secured debt.

The analytical center of this case is a pair of numbers produced by the same expert three years apart. NERA prepared a series of liability forecasts for the enterprise between June 2020 and May 2026. The 2023 forecast, which was used to size the keepwell obligations, ran two scenarios. The 2026 forecast, prepared in May of this year, ran one.

The declaration attributes the revision to three factors: a substantial increase in the number of claims, lower dismissal rates, and increased average settlement amounts. Each of those inputs moved in the same direction at the same time, which is how a forecast changes by an order of magnitude rather than a margin.

The balance sheet is unusually clean for a Chapter 11 debtor, which is a direct consequence of the 2023 transaction. Vi-Jon has no secured debt and no accrued outstanding third-party trade accounts payable as of the petition date. Its obligations are litigation, indemnification, professional fees, and intercompany.

The unperfected security interest on the Emprise advance is worth flagging. The declaration states plainly that the interest was never perfected. The plan term sheet assigns chapter 5 preference causes of action to the trust among the assigned causes of action, so the disposition of that advance is a question the trust would inherit rather than one the plan resolves on its face.

The retailer indemnification claims deserve equal attention. Approximately $15 million of contingent indemnification exposure runs to customers under agreements requiring the debtor to defend, indemnify, and hold harmless those customers from claims arising out of products it sold. Those customers are not affiliates and, as Section X describes, the term sheet expressly declines to extend the automatic stay to them absent consent.

By stated limits, insurance dwarfs every other component of the trust. From 1965 through October 31, 2016, the debtor and its predecessors purchased over $900 million of general liability, products liability, and umbrella coverage. The aggregate limit attributable to insurers who are currently solvent is approximately $900 million, with fewer than $20 million in limits issued by insurers now insolvent.

Under the plan term sheet, the debtor assigns its rights under the talc insurance policies to the trust, and the non-debtor affiliates contribute their own rights under those policies as well. The channeling injunction is to be structured to preserve and maximize the value of those rights, and the non-debtor affiliates waive any liens on the real property and sale proceeds. A coverage adversary proceeding cannot be commenced without the reasonable consent of Emprise before the effective date, and of the claimants’ representatives or committee and the future claimants’ representative.

Emprise commits $32 million of cash on the effective date, of which $25 million funds the trust and $7 million funds case administration in accordance with an agreed budget. The declaration describes that $7 million as exit financing; the term sheet describes it as part of the effective date contribution to be used per the budget. Layered on top is approximately $8.1 million of remaining undrawn capital commitments under the amended keepwell agreement, to be advanced following entry of the interim cash management order and not subject to repayment. Total committed cash across the case is approximately $40.1 million.

Trust Assets

The Contingent Settlement Fee

The settlement fee is the most structurally interesting piece of the package. It equals 50% of the first $40 million of gross consideration above $1 billion in a sale or merger of Emprise, capped at $20 million, and it is payable only if that transaction occurs at an enterprise value at or above $1 billion. The trust receives consultation rights on the computation, including enough information to assess the enterprise value calculation.

The effect is to give claimants a participation in future enterprise upside without giving them equity in Emprise and without imposing a fixed obligation on a business that may never transact. It also creates a monitoring problem the parties addressed directly, since the fee turns entirely on a valuation the payor controls.

Transfers Under the Plan

Two asset transfers sit inside the structure. A material set of the debtor’s assets, to be scheduled in a plan supplement, transfers to Emprise HPC, LLC or another non-debtor affiliate or designee under section 1123(a)(5)(D), in exchange for the monetary and non-monetary contributions described above. Separately, the real property is to be sold during the case under section 363 or under the plan under section 1123(a)(5)(D), with the parties intending to qualify for the section 1146(a) exemption from stamp and transfer taxes. If that sale is not consummated or requisite consent is withheld, the claimants’ representatives or the official committee may elect to have the real property itself contributed to the trust.

Whenever a debtor releases the affiliates that received its assets three years before it filed, the record supporting that release becomes the most examined part of the case. The declaration devotes several pages to building that record.

On April 1, 2026, the board adopted unanimous consents establishing a special committee and adopting a charter designating two independent directors as its members. The charter delegated to the committee exclusive authority over the relevant matters. On April 16, 2026, the committee directed a Sidley litigation partner to investigate potential claims against the debtor’s equity holders, affiliates, directors, managers, and officers, expressly including alter ego, veil piercing, successor liability, actual fraudulent transfer, and constructive fraudulent transfer. The investigation included diligence requests covering the books and records underlying the 2023 restructuring transaction and the emails of key employees, along with interviews of management at the debtor, Emprise, and Vivos.

The declaration does not disclose the committee’s conclusions. It discloses the outcome. As part of the restructuring support agreement, and in exchange for the affiliates’ contributions to the trust and to the case, the debtor agreed to release, under a confirmed plan, all claims and causes of action arising out of the 2023 restructuring transaction and all other estate claims and causes of action against the non-debtor affiliates.

What Survives

Claims relating to the 2020 ESOP Transaction are preserved, but only against a defined set of Excluded Parties: Berkshire Partners LLC, Berkshire Fund VI Limited Partnership, Berkshire Investors LLC, Berkshire Investors III LLC, and Brunner-family related entities and individuals. Those claims are assigned to the trust alongside insurance-related claims, talc-related claims, and chapter 5 preference actions.

Procedurally, the plan is deemed a motion to approve the estate claims settlement, and entry of the confirmation order constitutes court approval under section 1123 of the Bankruptcy Code and the applicable rules. That means the settlement of the estate’s claims against the affiliates would be adjudicated through confirmation rather than through a standalone contested motion earlier in the case.

Section 524(g) requires acceptance by at least 75% in number of the claimants whose claims are to be channeled. That requirement is the reason this case was negotiated before it was filed, and it explains the composition of the supporting party group.

The two source documents describe that support slightly differently, and the difference is worth noting precisely. The restructuring support agreement recites that the eight signatory Talc Claimants’ Representatives collectively represent at least 75% of holders by number, with a joinder mechanism allowing additional firms to become parties. The declaration describes the Ad Hoc Plaintiffs’ Group as nine plaintiffs’ counsel representing more than 80% of holders of talc-related claims. Either way, prepetition support sits at or above the statutory floor, and the margin above that floor is thin enough to matter.

The signatory firms agreed to support the plan, to recommend that their clients vote in favor and not opt out of the third-party releases, and, where they hold a specific power of attorney authorizing them to vote on a bankruptcy plan, to exercise it accordingly. Ballots will contain an opt out with respect to releases of talc claims against the non-debtor affiliates, or an opt in if the court does not permit an opt out.

Scope of the Injunction

The channeling injunction would permanently enjoin talc claims against the debtor, the reorganized debtor, the non-debtor affiliates, and each of their related parties, channeling them exclusively to the trust. Related parties is defined broadly to include current and former officers, directors, shareholders, lenders, employees, professionals, agents, consultants, and their assignees, predecessors, and successors. The trust indemnifies the non-debtor affiliates and their related parties against talc claims, and no claimant may receive a distribution without first delivering a written general release in a form acceptable to those parties.

Before the effective date, the debtor may file an adversary proceeding seeking a preliminary injunction and temporary restraining order extending the automatic stay to the non-debtor affiliates and their related parties. The claimants’ representatives and the prepetition future claimants’ representative agreed not to oppose it.

The Customer and Retailer Carve-Out

Customers and retailers were treated differently, and deliberately so. Absent consent of the claimants’ representatives or the official committee and the future claimants’ representative, neither the debtor nor Emprise will settle with or support relief for any customer or retailer, including any attempt to extend the automatic stay or enjoin talc claims against them, and neither will seek or support removal of talc claims against those entities to federal court. Commercial accommodations remain permitted, provided they do not settle, release, channel, or enjoin any talc claim against the customer or retailer.

Read against the approximately $15 million of retailer indemnification exposure disclosed in the declaration, that carve-out leaves the debtor’s customers exposed to continued litigation and leaves their indemnification claims against the estate outside the resolution the trust provides.

The parties built a 120-day case and then built the cost controls to match it. That pairing is intentional. When the trust corpus is fixed at $25 million of guaranteed cash, every dollar of administrative expense is a dollar that does not reach claimants, and the term sheet says so directly: the transactions will not be feasible or in the best interests of claimants unless the process is undertaken on a cost-efficient basis.

The controls themselves are unusually specific for a first day record. Professionals of the company, the official committee of unsecured creditors, and the future claimants’ representative are each subject to a budget and an agreed aggregate cap on fees to be incurred and allowed during the case, reflected in a budget that may be amended only with Emprise’s consent. A weekly budget variance report goes to Emprise, the committee, and the future claimants’ representative, setting out actual non-operating expenditures against budget with an explanation of material variances, certified by the chief restructuring officer. The parties also agreed that a solicitation process similar to the protections in Miyoshi America would be considered commercially reasonable.

Fiduciary outs are preserved throughout. The company’s board of managers or special committee may deviate from the agreement if it determines in good faith, on advice of counsel, that its fiduciary duties require it, and the official committee and the official future claimants’ representative reserve the same rights.

If the plan is confirmed as contemplated, the outcomes divide cleanly. The following reflects the framework set out in the restructuring support agreement and plan term sheet, all of which remains subject to negotiation of definitive documents, court approval, and confirmation.

What makes this case worth following is not its size. It is the structure. A liability that outgrew the vehicle built to contain it, a forecast revised by an order of magnitude, a fixed contribution that did not move with it, and a settlement that trades estate claims for the certainty of cash. Those are the questions section 524(g) practice has been working through for a decade, presented here at a scale small enough to see all of the moving parts at once.