The manufacturer of rubber hologram wristbands that claim to increase strength and flexibility is about to declare bankruptcy.
According to some reports a settlement amount of up to $57 million is on the cards after customers sued Power Balance claiming the products were bogus.
Earlier this year the company was forced to admit that its product is not scientifically-proven to enhance balance, strength or flexibility.
The Australian company distributing the product was forced to close its doors in May after the Australian Competition and Consumer Commission (ACCC) found the product to be a sham.
ACCC chairman Graeme Samuel said there was no supportive scientific evidence.
"Consumers should be wary of other similar products on the market that make unsubstantiated claims," he said. "They may be no more beneficial than a rubber band."
Other similar products in the market such as NRG and EKEN Power Bands – which claim NRL star Billy Slater as a client – have not come under the public scrutiny Power Balance has.
Tom O'Dowd, whose company sold Power Balance bracelets in Australia for $60 dollars, told Today Tonight the secret to the bracelet was in a hologram.
"It's a frequency that's been embedded in mylar tech in the hologram and that frequency - when it comes in comes within 2 inches of your skin - reacts with electrical field of your body," he claimed.
"You are the battery that powers this product."
It also had the backing of Melbourne chiropractor, Dr Matt Bateman, who tried it on hundreds of his patients.
"I felt it for myself," he told Today Tonight.
"I am not faking 500 per cent strength and stability, which is what I felt."
However a series of double-blind tests conducted by Richard Saunders from the Australian Skeptics showed the bracelets to be no more effective than a placebo.
Watch Richard Saunders from the Australian Skeptics debunk the claims of Power Balance on Today Tonight in 2009.
The bands were worn by various celebrities such as AFL player Brendan Fevola, NRL star Benji Marshall, basketballer Shaquille O'Neal and England cricket captain Andrew Strauss.
Power Balance today released a statement in the US regarding its 'corporate restructuring'.
"Due to the unauthorised marketing tactics of an independent distributor in Australia and the proliferation of counterfeit operations of which we obviously have no control, Power Balance has become the target of number of class action lawsuits," it said.
"The company has gone through extensive efforts to ensure that its marketing messages are supportable and compliant with local laws.
"We voluntarily filed for protection under Chapter 11 of the US Bankruptcy Code on Friday November 18th and are now taking a proactive approach to continuing growth by restructuring parts of the business.
"We will continue to bring innovative new performance technologies to athletes around the world, and are in the process of introducing Performance Mouth Gear (PMG) to the marketplace through the end of 2011 and into 2012."