Ice Cream Maker Files Bankruptcy Amid $23M Rival Judgment

The maker of ice cream found in grocery stores all over the country has just filed for bankruptcy while fighting a massive court ruling against it. Rebel Creamery entered Chapter 11 protection in Utah with nearly $23.9 million in reported liabilities. The company is appealing a roughly $23.785 million judgment awarded to rival Van Leeuwen Ice Cream during a trade-dress dispute.

Records from the U.S. Bankruptcy Court for the District of Utah show the filing happened on Aug. 14. Rebel listed its assets at approximately $13.78 million against liabilities of about $23.85 million. The bankruptcy paperwork describes Rebel ice cream as a product sold at Walmart, Kroger, Safeway and other major grocery chains nationwide.

Van Leeuwen appears among the unsecured creditors with that specific dollar claim attached to its name. Rebel marked this debt as disputed and noted the judgment is currently under appeal. In fact, the Van Leeuwen judgment accounts for nearly all the unsecured liabilities that Rebel listed at fixed amounts in its bankruptcy schedules. The company also reported holding about $5.22 million in cash and cash equivalents, $2.59 million in accounts receivable and $5.65 million in inventory when it filed.

The voluntary petition estimated both assets and liabilities somewhere between $10 million and $50 million. It stated funds would be available for distribution to unsecured creditors. Austin Archibald is listed as the company's manager and member, while Michael Johnson of Ray Quinney & Nebeker serves as bankruptcy counsel. This legal trouble arrived less than a month after U.S. District Judge Eric Komitee ruled that Rebel had intentionally infringed and diluted Van Leeuwen's trade dress through its ice cream packaging.

The judge wrote in a July 16 memorandum and order, "The evidence at that trial left no doubt that Rebel infringed and diluted Van Leeuwen's trade dress and did so intentionally." The lawsuit began back in 2021 when Van Leeuwen accused the company of copying the distinctive appearance of its ice cream pints. Court descriptions paint Van Leeuwen's trade dress as monochromatic cardboard pints with matching lids, a primarily pastel color palette, black script lettering and an overall minimalist design.

Komitee found Rebel's packaging was similar enough to create consumer confusion and bad faith. He ordered the company to stop selling products bearing that confusing trade dress and required a complete redesign of its packaging. Van Leeuwen originally sought $36.4 million in Rebel's profits, but the court reduced the award by 33%. The judge reasoned some sales were driven by demand for keto and better-for-you ice cream rather than the packaging at issue. That cut left Van Leeuwen entitled to $23.785 million in Rebel's profits from sales of those infringing pints.

Court filings do not establish that this judgment was the sole cause of Rebel's bankruptcy filing. The paperwork lists the Van Leeuwen litigation as being on appeal.