Millions in debt

Known from Mediashop: Company Neuro Socks insolvent

A picture from better days: Neuro-Socks founder Wolfgang Cyrol (center) with former ski racer Hans Enn (right) visiting the "Krone" in 2019.(Bild: Klemens Groh)

The Vienna-based company Neuro Socks is massively overindebted to the tune of around five million euros and has filed for insolvency, but is to continue as a going concern. The company claims to produce health-related clothing. However, following an injunction against advertising with health-related claims, such as for socks, the commercials were discontinued. According to the company's creditors' representatives, this led to a drop in sales and the current insolvency application. 

Liabilities amounted to 6.2 million euros and assets to 1.2 million euros, the AKV reported on Tuesday evening. According to KSV1870, the debtor originally set up an efficient direct sales system for its "neuro products" via so-called business partners, who work on a commission basis in a multi-level structure. Around 1000 business partners are currently active.

Various court proceedings
In 2019, Neuro Socks found a partner for broader marketing of its products in Mediashop GmbH, which offers a wide range of products on advertising TV. Mediashop took over the wholesale and TV advertising.

After 2020, however, there were various legal proceedings with the Verein für Konsumenteninformation (VKI) due to the health claims - which were ultimately no longer made. As a result, there was a sharp drop in sales and additional legal disputes with the main supplier, which were grounds for insolvency.

Company wants to restructure
The company now wants to restructure itself and continue operations. Initial restructuring measures have already been implemented. The insolvent company is offering creditors a 30 percent quota, payable within two years of acceptance of the restructuring plan under self-administration. The creditor protectors are examining the quota for its appropriateness.