Friday, January 16, 2009

Kimkins Bankrupt

In an attempt to avoid certification of the Class Action Lawsuit, Heidi Diaz filed for Chapter 11 bankruptcy for Kimkins.

Luckily, that did not prevent certification. Heidi failed to show up for the Class Action hearing and had a default judgment entered against her.

It remains to be seen what will happen with the bankruptcy. She may have a hard time explaining why she started a new website, Simple Choices Diet, when she supposedly is busy reorganizing Kimkins to regain it's footing as a viable operation.

There has been speculation that Heidi would move the existing Kimkins members to her new site. I doubt it. Not unless they are willing to become subscribers and pay the monthly fee the new site charges. Of course, she may offer them a free trial membership for a few months to just populate the forum for her. That would save her the cost of hiring professional sock puppets.

It's not surprising that Heidi is now changing her business model to a monthly payment plan instead of the lifetime membership she had on Kimkins. She must have regretted choosing that option. Lately, the only new posters on the site have been returning members that do not bring in any new revenue.

Personally, I think the new site is an attempt to get rid of Clexus, a joomla tech support company. Clexus may have helped finance the buy out from Catherine, the partner Heidi initially had for Kimkins. At least there must be a reason that Heidi is continuing to pay money to this company. Around 25% after business expenses, if I read the bankruptcy data correctly. Having seen how Heidi operates, my guess is that she is not too happy about sharing any income. She did not like Catherine getting 50% of the profit when Heidi "was doing all the work." Surely she has the same opinion about Clexus.

The new site is using SMF (Simple Machines) free forum software. Brandon has some experience with it as he has had it on his own forum for some time ( I wouldn't call him an expert as he seems to have had problems with custom tweaks he has done. But at least Heidi could hope to get rid of the tech expenses she now has for running the joomla board on Kimkins.

I'm sure that Clexus is not too happy about what is going on with Kimkins. Having the company run down by Heidi. Spending a lot of money on google ads that don't result in revenue. Seeing the reputation of the company going down the tube. But not having presence in this country, I suspect they have few options of making their voice heard. However, my guess is that they have already gotten a higher payback than they ever expected.

1 comment:

OhYeahBabe said...

Really great post! Thanks so much for all you do.

Kimkins Lawsuit - Class Certified! Thank you to everone who helped!