A face mask company started by the former CEO of an automotive supplier that imploded under shady circumstances in Detroit two years ago appears to be suffering the same fate.
Southfield, Mich.-based Redcliffe Medical Devices Inc., launched by Lalit Kumar at the height of the COVID-19 pandemic, filed for Chapter 7 bankruptcy last week in U.S. District Court for the Eastern District of Michigan.
The bankruptcy petition follows a class action lawsuit filed against the company earlier this year alleging it "sought to capitalize on the human suffering" of the pandemic after raising $4.3 million through crowdfunding for masks that were either defective or never delivered.
The company, which does business under the name Leaf Wellness Inc., marketed its Leaf mask as the "world's first FDA, UV-C N99, clear mask." It raised funds through the online crowdfunding platform Indiegogo with investment levels ranging from $49 for a single pack to $9,999 for a reseller pack. Other options included a "corporate pack" for $799 and a "Mom's Luxe pack" for $499 which was said to include carbon cartridges, color kits and masks that were self-sanitizing with UV-C light.
"In reality, Redcliffe advertised these alleged virtues of its Leaf masks as a way to obtain free money from thousands of customers," the lawsuit said.
In the bankruptcy filing, Redcliffe's assets are listed as being less than $50,000, while its liabilities are between $1 million and $10 million and its number of creditors is between 5,000 and 10,000.
The company had said that it produced 6 million masks per month at a 220,000-square-foot plant in Detroit — a false claim, according to crowdfunding backers who say they were ripped off.