JRJR Networks Leaders Ordered into Court

Photo: The former headquarters of The Longaberger Co., in Newark, Ohio.

According to a recent article in The Columbus Dispatch, the leaders of JRJR Networks, the parent of basket-making company Longaberger Co., have been ordered to appear in court in Columbus, Ohio, regarding money they were lent by Tami Longaberger, the former company executive of Longaberger.

In a filing in Franklin County Common Pleas Court, Judge Mark Serrott ordered John P. Rochon, John Rochon Jr. or other representatives of JRJR Networks to appear in court on June 8 and show what property, income, bank accounts or other means they might have to pay back the $1 million lent by Tami Longaberger.

In addition, Longaberger also is seeking to be repaid for legal fees she incurred to defend herself when state and local taxing authorities tried to hold her personally liable for taxes that JRJR Networks had stopped paying on the Longaberger Co.

In 2013, JRJR Networks, then known as CVSL, bought a 51.7 percent stake in the Longaberger Co., making it the first acquisition of what founder Rochon Sr. had promoted as a holding company of direct-sales businesses. At its peak, Longaberger had sales of $1 billion, supporting nearly 8,000 employees. However, the death of founder Dave Longaberger, father of Tami Longaberger, in 1999 started a decline that was never reversed.

Financial troubles persisted for both the Longaberger Co. and JRJR Networks, and in June 2014 Rochon asked Tami Longaberger, then CEO of Longaberger Co, for a $1 million loan. Ten months later, Longaberger sent Rochon a resignation letter, but, according to court filings, was asked by Rochon to withdraw her resignation so that the publicly traded JRJR would not have to report it to the U.S. Securities and Exchange Commission. A month later, instead of repaying Longaberger as she left the company, Rochon fired her for what he called “good cause.”

Tami Longaberger sued and, in February of this year, was awarded $2.1 million.

On April 2 of this year, the New York Stock Exchange suspended the trading of JRJR Networks’ common stock and notified the company of its intent to commence proceedings to delist it. On May 7, The Columbus Dispatch reported that Longaberger sales consultants received notification the previous Friday that “Longaberger, at this time, has ceased operations.”

Other companies under the JRJR Networks umbrella have had similar fates: Your Inspiration at Home, a maker of spices and other gourmet food items is in bankruptcy in New Zealand and Australia; My Secret Kitchen, a United Kingdom-based maker of gourmet foods is in liquidation; and Kleeneze and Betterware, both of which are in the United Kingdom, collapsed and went into administration, the British term for bankruptcy.