Dot Dot Smile filed for bankruptcy two and a half months after terminating its MLM opportunity and switching to wholesale.
On September 3rd, Dot Dot Smile began filing for Chapter 11 bankruptcy in California.
According to Dot Dot Smile’s petition, the business has $5.6 million in debt and $4.4 million in assets.
The principal creditors of Dot Dot Smile are:
Gary Thompson ($200,000; looks to be a family loan)
$325,000 is the debt reduction company’s contribution.
Mirror Clothing Co.’s $1.5 million goes to Hong Kong.
Nano ($600,000; no details given)
Network Ventures LLC ($353,846) for breach of contract
On Dot Dot Smile’s file, at least outside of the corporate side of things, nothing about MLM is mentioned.
According to a reader of BerhindMLM, as of July 31st, 2022
Since May, no one has been paid. Thousands of dollars are owed to certain persons. They fired every member of their staff.
The cynic in me finds it difficult to believe that Dot Dot Smile’s bankruptcy wasn’t intentionally orchestrated.
The proprietors of the company, Nicole and Jeff Thompson (right), probably anticipated bankruptcy and decided to sell the MLM company before filing.
Without the MLM possibility, it seems likely that there was never any real intention to maintain Dot Dot Smile.
I might be mistaken, but it doesn’t seem conceivable that Dot Dot Smile suddenly found itself $5.6 million in debt during the previous three months.
I’m not sure how the legalities of this all play out. However, even if everything is legal, it still speaks poorly of the Thompsons in terms of openness and Dot Dot Smile’s distributors.
The State of Financial Affairs report for Dot Dot Smile is expected on September 19th. The 12th of October has been set aside for a creditors’ meeting.
Because Nicole Thompson is the daughter of co-founders DeAnne and Mark Stidham, Dot Dot Smile is connected to LuLaRoe.
It’s unclear whether Dot Dot Smile declaring bankruptcy has or will have any effect on LuLaRoe’s corporate activities.