Leawood, Kansas (PRWEB) February 18, 2016
Butterfly Labs has reached a settlement with the Federal Trade Commission regarding the FTC’s claims, according to court documents, that the Company made misrepresentations to consumers. The agreement also resolves potential claims asserted by BFL against the FTC. Under the agreement the Company will pay the FTC $15,000 to satisfy all allegations, and has agreed to other terms such as continuing its previously established policies of paying refunds and of no longer accepting up-front payments from consumers on pre-orders. The September 2014 ex parte action, where BFL was not even given an opportunity to be heard by the Court, resulted in a temporary restraining order and appointment of a temporary receiver that effectively shut down the company for nearly four months. The Court later denied the preliminary injunction requested by the FTC. Among other things, the Court ruled that the FTC had not met its burden to show that it was likely to succeed on the merits of its case.
Commenting on the settlement, a BFL spokesperson stated, “BFL has agreed to settle for $15,000 to avoid ongoing litigation expenses and conserve remaining assets for payment of refunds to consumers. Despite successfully defeating the FTC’s preliminary injunction motion, the effects of the temporary restraining order, tying up assets, and the appointment of a temporary receiver decimated the Company’s ongoing operations. BFL was prevented from paying refunds and testing and shipping additional products during the long ordeal. The results of the shutdown and related publicity were devastating.”
“BFL’s highest priority is navigating the business to a path where the Company can generate the funds needed to pay its remaining debts, particularly outstanding refunds, which will be challenging.”
The FTC’s claims were in United States District Court for the Western District of Missouri - FTC v. BF Labs Inc., et al., Case No. 4:14-cv-00815-BCW, that the Company made misrepresentations to consumers.
BFL has established a page at http://www.butterflylabs.com/addressing-misperceptions to address the FTC allegations and misperceptions from online rumors.