Simply Better Brands and VRG Capital’s Strategic Bankruptcy Maneuver

Simply Better Brands

Unethical, But Should This Type of Corporate Manoeuvring Be Illegal?

In a shocking turn of events, Simply Better Brands Corp. (SBBC) and VRG Capital have come under scrutiny for allegedly orchestrating a strategic bankruptcy to expunge a $10 million debt, leaving numerous suppliers, including a digital maketing agency owed $1.3m USD, in financial distress.

This revelation follows the acquisition of PureKana, a subsidiary of SBBC (a listed company in Canada), and subsequent aggressive sales initiatives that have now been exposed as part of a larger scheme.

The Acquisition and Aggressive Sales Push

VRG Capital's Financial Misdeeds

A digital marketing agency was contracted by PureKana on a cost-per-acquisition basis to drive high-intent customer traffic to PureKana’s online store. The partnership initially seemed promising, with the agency exceeding sales quotas set by PureKana’s leadership. The agency’s efforts were instrumental in driving significant consumer traffic and boosting PureKana’s online sales, which were expected to lead to substantial financial rewards for both parties. The collaboration was built on mutual trust and a shared vision of growth, with the agency investing considerable resources to ensure the success of PureKana’s sales initiatives.

However, the situation took a dark turn following VRG Capital’s investment in Simply Better Brands. Shortly after the investment, there was an unprecedented push for increased sales, driven by former CEO Kathy Casey and PureKana Lead Jonel. This aggressive sales strategy was met with unwavering support from the digital marketing agency, under the assumption that their efforts would be financially rewarded. 

Management Changes and Financial Mismanagement

Trubar - Simply Better Brands

The agency ramped up its marketing campaigns, leveraging its network to drive even more high-intent traffic to PureKana’s online store. The marketing firm operated under the belief that the increased sales would not only meet but exceed the expectations set forth by PureKana’s leadership, thereby securing their financial remuneration.

However, it has now come to light that this push was a precursor to a bankruptcy declaration, strategically timed to avoid fulfilling financial obligations to creditors.

Despite the ongoing revenue streams from both PureKana and Simply Better Brands, there has been a blatant refusal to settle considerable debts owed to various vendors, including the digital marketing agency, totaling upwards of $10 million.


The Impact on Suppliers

VRG Capital's Financial Misdeeds

This refusal has crippled the agency’s operations, undermining their ability to compensate publishers and tarnishing their reputation within the digital marketing sphere. The timing and motives behind the acquisition and subsequent financial decisions raise critical questions about the integrity and ethical practices of Simply Better Brands and VRG Capital.

On February 1, 2024, Simply Better Brands announced significant management changes, including the resignation of CEO Kathy Casey and the appointment of J.R. Kingsley Ward as Interim CEO and Chairman of the Board. Ward, a managing partner at VRG Capital, brought extensive experience in structuring and monetizing investments, raising questions about the timing and motives behind these leadership changes.

Despite ongoing revenue streams from both PureKana and Simply Better Brands, there has been a blatant refusal to settle considerable debts owed to various vendors, including the digital marketing agency, totaling upwards of $10 million. This refusal has crippled the agency’s operations, undermining their ability to compensate publishers and tarnishing their reputation within the digital marketing sphere.

Bankruptcy Proceedings and Strategic Review

On April 2, 2024, Simply Better Brands announced the suspension of operations of its 50.1% owned subsidiary, PureKana, LLC, and the commencement of bankruptcy proceedings under Chapter 7 of the Bankruptcy Code of the United States. This decision followed a comprehensive review by a special committee of SBBC’s Board of Directors, which concluded that PureKana’s business model did not align with SBBC’s strategy for profitable growth.

The strategic review included an evaluation of PureKana’s performance, customer acquisition strategy, and long-term growth potential. The review revealed that the high costs associated with acquiring and retaining customers in the CBD market did not meet SBBC’s objectives for growth and profitability. Consequently, SBBC decided to cease supporting PureKana’s operations, leading to the bankruptcy proceedings.

PureKanna owned by Simply Better Brands

Critical Questions and Allegations

VRG Capital on the run

The timing and motives behind the acquisition and subsequent financial decisions raise critical questions:

  • Where have the funds generated from the customer traffic provided by the digital marketing agency disappeared to?

  • Why was an acquisition made for a company that was on the brink of insolvency?

  • What was the real intention behind the sudden and excessive push for sales immediately following VRG’s investment?


These questions suggest a premeditated effort by Simply Better Brands and VRG to exploit the goodwill and hard work of their partners, using bankruptcy as a shield against their financial responsibilities.

This not only reflects gross mismanagement of financial operations but also indicates a malicious intent to defraud and undermine the trust of partners and creditors alike.

Legal Action

The digital marketing agency, along with other affected vendors, stands in solidarity and is currently evaluating all legal avenues to address these grievances. They urge Simply Better Brands and VRG to reconsider their stance and fulfill their obligations. The agency has stated that they will not sit idly by while deliberate actions jeopardize the livelihood of their publishers and the integrity of their services.

The unfolding situation with Simply Better Brands and VRG Capital highlights the potential for strategic bankruptcies to be used as a tool to evade financial responsibilities. This case serves as a stark reminder of the importance of transparency and ethical practices in corporate governance. As the investigation continues, all eyes will be on Simply Better Brands and VRG to see how they respond to these serious allegations.