The abrupt collapse of Modere in April 2025 and the subsequent Chapter 7 bankruptcy filing of its former parent company, Maple Mountain Group, mark a watershed moment for the multi-level marketing (MLM) sector in North America.

While initial reports, such as those from BehindMLM, have provided important factual groundwork, a richer understanding emerges by placing these events within their financial, legal, and industry-wide context.

Let’s examine what the collapse—and the responses to it—portend for the future of direct selling.

The Key Individuals and Their Roles

  • Thomas Avila (Chief Restructuring Officer, signing Chapter 7): A longtime restructuring and turnaround veteran, Avila’s role was to oversee the final shutdown and bankruptcy process, making difficult decisions about how and where to allocate remaining company funds for compliance and wind-down purposes.
  • Nate Frazier (Former President): Previously President and executive chairman, Frazier “quietly disappeared” at the time of Modere’s collapse. His leadership tenure, which began after the ouster or departure of previous CEO Asma Ishaq, was marked by extensive legal wrangling with top field leaders, a failure to arrest revenue decline, and open questions about strategic direction.
  • Emily Gibson (Coach): A prominent name in the MLM leadership coaching space, Gibson provided systems, training, and trauma-informed coaching for Modere’s distributor force. Her significant fee suggests direct engagement with Modere’s executive team in a bid to staunch attrition and drive morale in the run-up to collapse.
  • Majority Owners (Z Capital, S.A.C. Capital): Private equity backers were both lauded for bringing sophisticated funding to Modere and criticized for prioritizing debt recapitalizations over long-term operational or distributor health.

Maple Mountain Group’s Chapter 7 Bankruptcy: Key Details

On June 2, 2025, Maple Mountain Group, Inc. who was doing business as Modere, filed a voluntary Chapter 7 petition in the United States Bankruptcy Court, District of Nevada. The petition was a direct result of the company’s total shutdown in April 2025, and it ushered in a legal process designed to liquidate all available assets and settle debts with creditors in accordance with U.S. bankruptcy law.

The filing was signed by Thomas Avila, acting as Sole Director and Chief Restructuring Officer, whose background lies in turnaround management and complex financial restructurings. The official Statement of Financial Affairs, filed on June 16, 2025, revealed no revenue from any business activity since February 1, 2025—signaling a total business standstill during the preceding months.

According to bankruptcy court documents and monitoring services:

  • Assets: $0 to $100,000 (reported personal property valued at approximately $9.4 million)
  • Liabilities: $100 million to $500 million
  • Number of creditors: Estimated between 5,001 and 10,000
  • Secured claims: $169,455,141
  • Unsecured nonpriority claims: $12 million
  • Unsecured priority claims: $0
  • Nature of business: “Soap, Cleaning Compound, and Toilet Preparation Manufacturing” (but operational MLM activities had ceased)

This enormous liabilities-over-assets imbalance confirms the scale of Modere’s unresolvable debts at closure. The filings were designated as a “no asset” case, suggesting little to no funds would be available to satisfy unsecured creditor claims.

A particularly striking detail: $6.1 million was spent in the 90 days before filing for bankruptcy. More than $1 million went to legal and consulting fees, and significant payments were made to outside organizations and individuals:

  • Legal Counseling/Firms: $1 million for bankruptcy/legal guidance and restructuring advice.
  • Emily Gibson Coaching: $245,305 for Network Marketing Coaching, with a focus on female “empowerment.”
  • Direct Selling Association: $65,000 for industry association dues or lobbying.

Much of this spending appears to have been part of a strategic, possibly last-ditch, effort to stabilize or quickly manage liabilities as the final collapse loomed. The significant sum directed toward Emily Gibson Coaching underscores the company’s focus on motivating and retaining its distributor force in the final quarter—a move that failed to prevent mass attrition once collapse became imminent.

The Statement of Financial Affairs is a court document that outlines business activity, asset liquidation, major disbursements, litigation, and other material exposures prior to bankruptcy. In Maple Mountain Group’s case, the disclosures show no ongoing business revenue, heavy legal spend, strategic payments to industry consultants, and multiple creditor categories spread across secured and unsecured lines. For many stakeholders, this document is confirmation that the company’s final months involved desperate measures with little hope of recovery.

The Legal Storm: Employee Litigation and WARN Act Violation Allegations

Before, and certainly after, bankruptcy, legal claims began stacking up against Modere and its parent company. Two especially pivotal cases highlight the exposure:

Mass Layoff and WARN Act Compliance: A civil lawsuit filed April 21, 2025, by former Modere employees in Utah alleges “approximately 160 employees” were terminated without advance written warning, violating the federal Worker Adjustment and Retraining Notification (WARN) Act. This law requires companies with 100 or more employees to provide at least 60 days’ advance notice for mass layoffs or plant closures affecting 50 or more workers. Former employees claim they received no such notice, and instead were let go on short notice as the Modere collapse began in earnest. As of August 2025, a class-action effort is underway to secure 60 days of unpaid wages, salary, commissions, bonuses, and accrued benefits.

Supplier Lawsuits and Claims of Insolvency: CSB Nutrition, a principal supplier, has sued Modere for nearly $2 million in unpaid bills. Court filings label Modere as “insolvent,” and allege the company “wanted to make just enough payments… to ensure CSB did not refuse to continue manufacturing.” Eventually, all contact between the supplier and Modere ceased following the company’s collapse—a pattern that left numerous vendors and independent contractors without recourse.

Numerous laid-off employees took to social media to describe not only the shock of the company’s “no notice” shutdown, but also to expose what they saw as a lack of transparency and fairness by both management and private equity owners. Particularly galling was the timing: with the layoffs coming immediately before a scheduled commission/payment cycle, many felt deliberately cut off from income they had rightfully earned.

The Collapse of Modere: Timeline and Underlying Factors

Modere’s history is longer and more eventful than many observers realize. Originally founded as Neways International in the early 1990s by Thomas and Leslie Mower, the organization quickly achieved international expansion. But it was not without controversy—legal entanglements, a major FDA recall, tax evasion charges, and successive ownership changes all left scars.

After the departure of the original founders (following a high-profile federal guilty plea and prison terms for tax evasion), the business changed hands several times—most notably acquired by Golden Gate Capital, then majority-owned and restructured by Z Capital Partners (a private equity fund) and S.A.C. Capital Advisors beginning in 2012. In 2014, Neways was rebranded as Modere with a new “clean living” marketing philosophy.

Up until its final years, Modere had moments of explosive success. At its peak, the company was estimated to have annual revenues between $100 million and $400 million, with its flagship “Liquid BioCell” collagen line winning multiple industry awards and building a loyal consumer base.

However, the financial momentum masked two growing weaknesses:

  • Hefty debt loads: Following private equity leveraged recapitalizations, Modere faced between $100 million and $500 million in declared liabilities by 2025, and urgent debt repayment crises by 2023.
  • Stagnant/declining sales: Leading up to closure, Modere suffered 30% shrinkage in workforce and slowing sales, and invested insufficiently in product innovation or infrastructure.

Legal and industry sources allege that private equity owners prioritized extracting value (via debt restructuring, not reinvestment in operations), an assertion given weight by distributor lawsuits and ex-executive statements.

On April 11, 2025, Modere abruptly ceases all operations, laying off all employees and posting a six-language “Thank You for the Journey” message on its homepage. Product orders placed prior to the shutdown were to be fulfilled; all other operations ceased, including distributor commissions or refunds beyond pre-paid orders. There was no advance warning. The company failed to file a WARN Act notice required by law, despite dismissing more than 100 corporate and warehouse workers. Notably, the collapse followed months of distributor attrition and exodus of top field leaders—many of whom had already begun transitioning teams to rival platforms or new ventures.

Behind the scenes, CEO succession instability, a wave of lawsuits (notably with “top earner” Justin Prince), and failed attempts to reinvigorate product and affiliate expansion convinced many insiders that Modere’s final flameout was only a matter of time.

The Shaklee Acquisition: A “Fire Sale” Asset Transfer

Within weeks of the closure, Shaklee—a legacy wellness MLM with a storied history and robust North American presence—announced it had acquired “substantially all of Modere’s business” through a subsidiary. The Acquisition, completed in May 2025, included trademarks, patents, formulas, and inventory of top Modere products such as Liquid BioCell Collagen, Trim, Burn, Sculpt, and Curb.

What Shaklee Acquired:

  • All exclusive rights to sell Liquid BioCell Collagen products under the BioCell® brand.
  • Modere’s North American manufacturing/testing equipment and inventory.
  • All trademarks, patents, and formulas related to Modere’s popular wellness product lines.

Former Modere Social Marketers and customers are being invited to the Shaklee network, and major products are available through Shaklee’s direct selling platform beginning late May 2025.

Shaklee is a multi-billion-dollar wellness MLM company dating back to 1956 with a complete portfolio in the supplement and personal care industries. Its core market is the U.S., but it has growing operations in Asia. Shaklee’s annual online revenue (from shaklee.com) was $23 million in 2024, with projected growth of 10-15% for 2025, suggesting that Shaklee is reasonably well positioned to absorb and monetize Modere’s key assets.

Roger Barnett, Shaklee’s CEO, emphasized continuity for Modere customers and a home for displaced social marketers—though “continuity” is a relative term given the abruptness with which Modere’s original business terminated and the uncertain legal status of distributor agreements at the time.

Estimates suggest between 160 and “hundreds” of employees across Utah were terminated. Beyond the wage/benefit claims now progressing through the courts, social media testimonials from ex-staff decried lack of notice, the overnight disappearance of health benefits, pensions, and legal recourse, and the emotional toll of being left in limbo with no transition plan or explanation.

The closure highlighted once more the inherent risk in the “single-company income” model and the volatility intrinsic to MLM lifecycles built around key personalities and aggressive recruitment. The most immediate and personal impact was felt by thousands of Modere distributors, many earning anywhere from modest monthly sums to six-figure annual incomes. For most, income disappeared overnight. There were no transition bonuses or formal handoff arrangements, and most were left to scramble for alternative business or join one of several rival teams already being organized before the official announcement.

Notable leaders such as John and Nadya Melton (developers of the Add, Tag, Message—ATM—social system) quickly pivoted to launch new independent ventures, including the pre-launch of Nueva—a fresh, distributor-led wellness and digital products company designed to avoid the concentration-of-power and private equity dependence that many blame for Modere’s demise.

The Birth of Nueva: A Direct Response to Industry Trauma

One of the most immediate and fascinating consequences of Modere’s collapse was the rapid coalescence of Nueva—a new wellness and lifestyle product company led by top ex-Modere leaders such as John and Nadya Melton, Brian McMullen, and others.

Nueva explicitly positions itself as a direct answer to the dangers of private equity control and the necessity for distributor-first governance:

  • Self-funded, no outside investors: Nueva founders are public about refusing private equity funding—a sharp contrast to the Modere/Z Capital experience.
  • Compensation plan continuity: Nueva’s business opportunity mimics Modere’s but is tweaked for greater transparency and entry-level fairness. Remember, we do not believe that there is true fairness within the MLM business model, but this is according to Nueva, of course.
  • Product innovation focus: New digital and health products, with early launches (hydrogen/nitric oxide beverage, advanced peptide supplement) designed for differentiation.
  • Community and purpose: Core messaging places emphasis on faith (isn’t that culty?), service, and distributorship as community rather than solely as sales or recruitment vehicles.

As of mid-2025, pre-launch activity around Nueva has attracted more than 60,000 social promoters—a sign of both pent-up demand among ex-Modere field teams and the cyclical nature of network marketing “migration” in times of crisis.

Regulatory and Industry-Wide Implications

Modere was a long-time member (until collapse) of the Direct Selling Association (DSA), as evidenced by substantial payments in its final days. Membership in the DSA signals both a company’s participation in direct selling lobbying efforts and its adherence (or at least attestation to) voluntary industry codes on earnings representations, product claims, and ethical recruiting.

High-level DSA payments in the final quarter may have represented an attempt to influence DSA advocacy/lobbying on Modere’s behalf, or to maintain support as legal/regulatory risk accelerated.

MLM regulation in the U.S., Canada, and globally is currently undergoing a shift toward stricter consumer protection, transparency, and financial oversight. Recent legislation and guidance focus on:

  • Tighter restrictions on product and earnings claims (pressure from BBB National Programs, FTC, and state regulators).
  • Enhanced requirements for advance disclosures to new recruits and for ex-distributor earnings reporting.
  • Direct pressure to differentiate legitimate MLM from pyramid schemes. The AntiMLM Community has also been pushing for MLM companies to be seen as pyramid schemes, with no legal difference.
  • New country-level laws (e.g., Turkey, 2025) imposing caps on commissions paid from recruitment relative to end-customer sales.

The collapse of Modere may accelerate industry consolidation, with legacy companies acquiring younger brands at fire-sale prices (as seen with Shaklee), and large distributors banding together to launch their own ventures with “distributor-first” governance models.

Recent years have seen a sharp rise in WARN Act-related class actions against direct selling companies as more MLMs execute sudden, large-scale layoffs or closures without proper notice. Settlements in this space typically favor affected workers but payouts are often negligible when companies follow up with bankruptcy filings.

Industry Precedents: Not the First, Not the Last

Modere is far from the only major MLM company to have suffered catastrophic financial collapse or filed for bankruptcy. There have been many examples of this, such as:

  • WorldVentures: Filed for bankruptcy in 2020, multiple lawsuits from representatives and questions over the sustainability of its travel product MLM model.
  • Advocare: Settled with the FTC in 2019 and ceased all MLM operations following $150 million in regulatory penalties for operating a pyramid scheme.
  • LuLaRoe, Herbalife, Nu Skin, Younique: Each of these have faced major legal or regulatory cash drains, class-actions, or restructuring/bankruptcy headlines in the last decade.

Commonalities include excessive recruitment vs. product sales focus, top-heavy compensation plans, and leadership instability. In each, rapid distributor migration follows as the field evacuates to newer or more stable companies.

Industry insiders and prominent coaches alike have framed the Modere collapse as both an anomaly (in its abruptness) and an all-too-predictable denouement for a business model reliant on constant, often debt-fueled, expansion.

Future of the Modere Brand and Industry Outlook

Thanks to Shaklee’s asset acquisition, Modere’s flagship formulas—especially Liquid BioCell—live on, though the original Modere brand is defunct. Shaklee’s integration means past Modere customers can still access popular products, but the social marketer opportunity and field team structure have been fundamentally reconstituted within Shaklee’s system.

As for the MLM industry at large, observers foresee a continued trend of consolidation, increased focus on compliance and digital transformation, and a new generation of field-driven companies emerging in response to perceived mismanagement and loss of trust in traditional MLM corporate leadership.

The bankruptcy of Maple Mountain Group and the consequential Modere collapse serve as a textbook case study in the vulnerabilities of the MLM business model when faced with over-leveraging, leadership churn, regulatory pressure, and rapid distributor migration. For many, the story is a warning—and a motivator—for greater financial prudence, diversified income strategies, personal branding, and renewed calls for industry accountability.

Stakeholders at every level—the field, corporate leadership, suppliers, and even competitors—will continue to watch closely as court cases resolve, distributor class actions proceed, and as new ventures like Nueva seek to rise from the ashes of Modere’s spectacular fall. For now, the curtain comes down on one of the industry’s most high-profile brands, but the legacy—and the lessons—are likely to shape the MLM landscape for years to come.

My Final Thoughts

Modere’s abrupt downfall, Maple Mountain Group’s bankruptcy, and the corporate shell game that led to the swift transfer of assets while leaving former employees, distributors, and suppliers scrambling, serve as sobering evidence that self-regulation in the MLM industry is an illusion. The harm did not come from bad luck or isolated mistakes but from the very design and incentives of the MLM business model—a design that rewards a few while leaving the vast majority empty-handed, disillusioned, and too often, financially damaged.

Distributors, customers, and employees deserve better. The lessons of Modere, Neways, and a long line of failed MLMs should prompt all of us—consumers, regulators, and lawmakers—to demand accountability and reform.

If you’re considering joining any MLM or direct selling opportunity, research independently. Ask for audited income disclosures, not marketing hype. Policymakers must act now to shore up consumer protections, mandate transparency, and ensure that the next Modere-style collapse isn’t inevitable.

And above all, remember: real opportunity is built on transparency, ethical treatment, and sustainable value—not on the endless recycled promises of pyramid recruitment. Let’s not allow the lessons of Modere’s collapse to fade in the flurry of rebranded product launches and corporate PR. The time for meaningful reform, honest oversight, and consumer-first accountability is now.

Stay informed. Stay skeptical. Stay protected. Consumer protection begins with vigilance, but it must end in systemic change.

By Beth Gibbons (Queen of Karma)

Beth Gibbons, known publicly as Queen of Karma, is a whistleblower and anti-MLM advocate who shares her personal experiences of being manipulated and financially harmed by multi-level marketing schemes. She writes and speaks candidly about the emotional and psychological toll these so-called “business opportunities” take on vulnerable individuals, especially women. Beth positions herself as a survivor-turned-activist, exposing MLMs as commercial cults and highlighting the cult-like tactics used to recruit, control, and silence members.

She has contributed blogs and participated in video interviews under the name Queen of Karma, often blending personal storytelling with direct confrontation of scammy business models. Her work aligns closely with scam awareness efforts, and she’s part of a growing community of voices pushing back against MLM exploitation, gaslighting, and financial abuse.