Herbalife Agrees to Distribute Cash, Product Refunds in Pyramid Scheme Lawsuit

  |   05 November, 2014   |   390   |   3980

LOS ANGELES—Herbalife Ltd., the global marketer of protein shakes and nutritional supplements, has agreed to settle a putative class-action lawsuit originally filed in California by a former distributor who claimed the company was a pyramid scheme.



The 34-year-old company arranged to set aside USD $15 million in cash for affected distributors and other expenses, $2.5 million for product refunds and abide by more than one dozen corporate policies that are intended to address claims in the lawsuit, according to court records filed last week. Last year, a federal judge refused to dismiss the lawsuit, and the parties have been working on settlement talks for months.



The settlement was reached about 18 months after the lawsuit was filed, but before U.S. District Judge Beverly Reid O’Connell had certified a class of distributors.