SmileDirectClub Shuts Down After Filing for Bankruptcy

SmileDirectClub, a telehealth firm that offered teeth-straightening units by way of the mail and confronted criticism from medical teams, stated on Friday that it had shut down.

The firm, based in 2014, offered tooth aligners on-line and in its outlets for $1,850. It marketed them as a quicker, cheaper different to braces. SmileDirectClub’s preliminary public providing in 2019 valued it at $8.9 billion.

SmileDirectClub served greater than two million prospects over practically a decade. But the corporate was not worthwhile and filed for Chapter 11 chapter in September with practically $900 million of debt, court docket filings and monetary statements present. And this 12 months, it settled a lawsuit from the District of Columbia legal professional basic’s workplace that had accused the corporate of utilizing confidentiality clauses to stifle shopper criticism.

On Friday, SmileDirectClub stated on its web site that it was shutting down its international operations instantly. It apologized to prospects for the inconvenience, and urged them to seek the advice of a health care provider or dentist about future remedy.

Outstanding orders have been canceled, the corporate stated. Customers on a month-to-month installment fee plan are anticipated to proceed making all of their funds. Those who’ve accomplished remedy will now not qualify for the free touch-ups that the corporate had assured.

For prospects looking for refunds, SmileDirectClub stated that it could have extra info “once the bankruptcy process determines next steps.”

SmileDirectClub was based in Nashville by childhood associates Alex Fenkell and Jordan Katzman. To order its merchandise, prospects made a mildew of their tooth at dwelling with a equipment mailed by the corporate or had their tooth scanned at a “SmileShop” retail location. The scans have been reviewed by dentists and orthodontists within the firm’s community.

SmileDirectClub’s providers, which didn’t require in-person visits, had drawn criticism from dentist and orthodontist teams. The firm has sued a few of these critics and accused California’s dental board of stifling competitors.

After the corporate went public, its shares traded at about $18 apiece however later turned a penny inventory. As the corporate failed to show a revenue, it additionally handled authorized fights all through its existence and dissatisfied prospects who accused it of false promoting and of violating Food and Drug Administration laws.

SmileDirectClub provided refunds inside 30 days after its aligners arrived, however something after that was thought-about exterior the corporate’s official refund coverage and got here with a nondisclosure provision, The New York Times reported in 2020. The settlement prohibited prospects from telling others in regards to the refund and required them to delete destructive social media posts and evaluations.

The District of Columbia legal professional basic’s workplace sued the corporate in 2022, accusing it of blocking prospects who had been harmed by its merchandise from submitting complaints with regulators or regulation enforcement. Under a settlement to resolve the litigation earlier this 12 months, SmileDirectClub was required to launch greater than 17,000 prospects from the agreements and pay $500,000 to the district. The firm stated within the settlement that it had not violated the regulation or engaged in unfair or misleading practices.