Tag Archives: pure weight loss bankruptcy

Former LA Weight Loss Loses $20M EEOC Suit

FranchisePick.com reports that the EEOC has won a $20 Million discrimination lawsuit against Pure Weight Loss (formerly LA Weight Loss) despite the fact the company went into bankruptcy in January, 2008 (see The EEOC Celebrates $20M Victory Over Non-Existent Company)

In a nutshell, the EEOC has won $20 million and other “significant relief” on behalf of workers who were never hired by Pure Weight Loss (formerly LA Weight Loss), which closed its 400 locations earlier this year.  Thanks to this landmark victory by the EEOC, the male employees who were never hired will be entitled to $16 million in back pay for work they never performed, and will now be offered positions in the company that no longer exists.

The EEOC becomes Creditor #100,001.

The closing of Pure Weight Loss (formerly LA Weight Loss) left thousands of customers cheated out of prepaid services and left employees nationwide jobless.  With more than 100,000 creditors and liabilities at $10 million to $50 million, Pure Weight Loss filed for Chapter 7 bankruptcy.  Shortly thereafter, the Attorney General of PA sued for fraud and moved to seize both corporate and personal assets of the company and its founder, Vahan Karian.

According to the EEOC, Pure Weight Loss discriminated against male applicants, having denied them the same opportunity to receive pre-Christmas pink slips and bounced paychecks like their female cohorts.  In its battle against employment injustice, the EEOC is not fazed by a small obstacle such as the non-existence of the employer.

Did Pure Weight Loss Close Because of the EEOC?

The EEOC originally sued L.A. Weight Loss Centers, Inc. (LAWL) in February 2002 under Title VII of the 1964 Civil Rights Act,  alleging that the company “engaged in a pattern or practice of disparate treatment against men in its recruiting, hiring, and assignment of employees.”  On September 6, 2007, an EEOC press release announced “A federal court has ruled that the U.S. Equal Employment Opportunity Commission (EEOC) may proceed to trial with its class sex discrimination lawsuit against L.A. Weight Loss Centers, Inc. (LAWL) on behalf of qualified male applicants nationwide.”

The judge’s decisive rejection of LAWL’s motions to dismiss the case indicated that the EEOC case, which included “discriminatory admissions by various high-level LAWL officials,” was strong.

Three months later, Pure Weight Loss announced it was closing all 400 centers nationwide and laying off all employees, male and female.

Could it be that Vahan Karian’s LA Weight Loss knew this judgement was coming all along, and decided to change its name to Pure Weight Loss and shut down all its center shortly thereafter because it knew the EEOC was going to win?

There’s more to this story than meets the eye.



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PURE WEIGHT LOSS MEMBERS: The PA Attorney General Wants YOU!

I was in contact with the PA Attorney General’s office last week. They are actively investigating the closing and subsequent bankruptcy of Pure Weight Loss and the actions of Pure Weight Loss CEO Vahan Karian (aka Vahan Karabajakian).

If you were a member or employee of Pure Weight Loss, and have lost money or were otherwise injured by their abrupt closure and unethical business practices (no matter where you reside) you are urged to fill out a complaint with the office of the PA Attorney General. You may just get your money back, yet!
Here is the message from the Attorney General:

The Pennsylvania Office of Attorney General has been involved in the Pure Weight Loss case since January, 2008. Please use the following link to review our press release detailing our consumer protection lawsuit against PWL and the company’s owner:


PWL, based in Horsham, PA, filed for bankruptcy shortly after the business ceased operating, January. The bankruptcy case, along with our consumer protection lawsuit, are both still actively working through the state court system and federal bankruptcy court.

We continue to encourage consumers who believe they suffered losses because of PWL’s actions to use the following link to access the online complaint for our Health Care Section (That is the section of our office handling this case):

At the very least, you’ll have the satisfaction of knowing that you helped bring Mr. Karian to justice, and helped the PA Attorney General send the message that they will not tolerate this kind of mistreatment against consumers.


Pure Weight Loss Bankruptcy Update

Interesting article from the Real Deal in Syracuse, NY.

Did any of you get the “accidental” letter mailed to them mentioned in this post?

Syracuse, New York (WSYR-TV) – If you were a member of the now-bankrupt Pure Weight Loss, you may have recently received a notice from the bankruptcy court. It’s a little confusing, and you may be wondering whether it means the case is over.

Here’s The Real Deal on what the letter means.

We spoke with the bankruptcy trustee, and he says everything is still being worked out, and that letter was actually sent by mistake.

The letter makes it seem like there was a resolution to the bankruptcy case and basically, you’re out of luck. But the trustee tells us that’s not the case. There was recently an auction to sell off all of Pure Weight Loss’s assets. This letter is about that auction, and should have never even been sent out to all the creditors.

The bankruptcy trustee says over 8,500 people have filed claims with the court looking for a refund.

There is some money in the case, but nowhere near enough to pay everyone.

And of course, secured creditors – like banks – get paid off first. The trustee is hoping they’ll be enough left after that to give customers at least something back, but not everyone may get money back, and if you do it’ll likely be far less than what you’re actually owed.

Also, don’t expect a check in your mailbox anytime soon. In bankruptcy cases like this one, it can take three to five years to settle and close the case.