Laguna Niguel's Power Balance Files for Bankruptcy

Power Balance, the Laguna Niguel company whose bracelets are donned by top athletes and celebrities alike, has filed for bankruptcy protection and could be forced to repay tens of millions of dollars to customers who bought its popular silicone bracelets.

Earlier this year, Power Balance was sued by customers alleging that it falsely claimed that its bracelets improved athletic performance. The class-action suit was brought by consumers who claimed they were tricked into believing the hologram-embedded band improved balance, flexibility and strength. There was, however, no evidence to back up those claims.

In September, Power Balance agreed to settle the lawsuit filed in federal court in Los Angeles. Under the terms of the settlement, which is not yet finalized, anyone who bought a wristband would be eligible for a refund of the $30 purchase price, plus $5 for shipping, according to federal court documents.

According to a report in the Sacramento Bee, the settlement could cost Power Balance $57.4 million, said Kevin Boyle, an attorney with Panish, Shea & Boyle and the plaintiffs' lead counsel on the case.

Last year, Australian Competition and Consumer Commission ordered Power Balance to admit there was "no credible scientific evidence that supports" claims that the wristbands improve athletic performance.