Rebel Creamery Files Bankruptcy After Van Leeuwen Wins $23 Million Ice Cream Lawsuit

Rebel Creamery filed for Chapter 11 bankruptcy protection in Utah on 14 August – less than a month after Van Leeuwen Ice Cream won a $23.785 million (£17.6 million) judgment against the company.

The Utah-based ice cream maker listed assets and liabilities between $10 million and $50 million (£7.4 million to £37 million). Rebel filed an appeal on 12 August, two days before seeking bankruptcy protection.

Judge Rules Rebel Must Pay $23.8m

US District Judge Eric Komitee ruled on 16 July that Rebel intentionally infringed Van Leeuwen's protected trade dress. He found the company's pastel pints and black cursive branding similar enough to confuse customers.

Van Leeuwen sought $36.4 million in Rebel's profits from the disputed pints. Judge Komitee reduced the amount by 33 per cent because some customers bought Rebel products for their keto or 'better-for-you' appeal.

The reduction left Van Leeuwen entitled to $23.785 million (£17.6 million) in Rebel's profits. Judge Komitee also ordered Rebel to stop using confusingly similar packaging and redesign its pints.

Judge Komitee rejected Rebel's account of how it developed the packaging, finding that parts of the company's testimony were fabricated. He concluded the similarities were no accident.

Rebel denied copying Van Leeuwen's packaging throughout the legal proceedings. The company argued that its founders had not seen Van Leeuwen's design before creating their own pints.

The court also reviewed evidence of marketplace confusion during the trial. Consumers and industry professionals had mistaken one brand for the other, according to Judge Komitee's findings.

Rebel Appeals Before Chapter 11 Filing

Rebel filed a notice of appeal on 12 August. Two days later, the company sought Chapter 11 protection in the US Bankruptcy Court for the District of Utah.

The bankruptcy filing identifies Rebel Creamery LLC as a Midway, Utah-based business. It also states that the company expects funds to remain available for unsecured creditors.

Rebel reported assets between $10 million and $50 million (£7.4 million to £37 million). It listed liabilities within the same range, while court records identify the bankruptcy case as 26-25006.

Rebel listed Van Leeuwen's judgment as a disputed unsecured claim under appeal. The company continues to challenge the ruling as the bankruptcy case moves forward.

Chapter 11 bankruptcy, which allows businesses to restructure their finances under court supervision, means Rebel can address its debts through the Utah case. It will pursue its separate appeal against the $23.785 million judgment in New York.

How the Packaging Dispute Began

Van Leeuwen sued Rebel in the Eastern District of New York in April 2021. It accused the company of copying the appearance of its retail ice cream pints.

Van Leeuwen described its trade dress as pastel monochrome packaging with matching lids and black script. The company said those elements created a distinctive overall look that consumers recognised.

Rebel launched in 2017 and began selling its pints in grocery stores in 2018. Court findings said Van Leeuwen discovered Rebel's products in late 2018 or early 2019.

The court found that federal and New York law protected Van Leeuwen's trade dress. It also held Rebel liable for unfair competition and upheld Van Leeuwen's dilution claim.

Rebel markets low-carb ice cream with no added sugar through major US retailers. Its website remained active after the bankruptcy filing and continued to display its product range.

The Chapter 11 filing does not automatically mean the company will close. Rebel is seeking reorganisation rather than liquidation as it challenges the judgment.

The Utah bankruptcy court will handle Rebel's restructuring case. Rebel will pursue its appeal separately against the $23.785 million judgment.