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The once-popular tooth-straightening startup, Smile Direct Club, is set to shut down, leaving many customers puzzled about their ongoing monthly payments. The company, which filed for bankruptcy in September, had been negotiating a deal that would inject fresh capital and pull it out of trouble.
Unfortunately, these efforts fell through as the crucial support from its major lender, HPS Investment Partners, and other creditors, was not secured. The company is owned by several people, with David Katzman serving as the Chief Executive Officer and Chairman. Assisting him in operational matters is Steven Katzman, the Chief Operating Officer and Director.
However, the company was co-founded and owned by childhood friends Alexander Fenkell and Jordan Katzman.
The company clarified on its website that new customers can no longer avail of Smile Direct Club's services, and existing customers will not receive customer care support. The company advised seeking help from local doctors or dentists instead.
However, the company stated that those on its SmileyPay Plan will still be expected to "make all monthly payments until payment has been made in full per the terms of our SmilePay program."
"They getting sued for sure" - Social media users react to Smile Direct Club seeking payment amid closure
The closure raised concerns among existing customers, especially those who will still be required to fulfill their monthly payments despite the discontinuation of services and customer care.
As netizens came across this news, they took to social media to react to it. Several social media users took to the comments section of @theshaderoom's post on Instagram and wondered why customers needed to make monthly payments if the company no longer existed.
Smile Direct Club went public with a market cap of nearly $9 billion in 2019
In 2019, Smile Direct Club went public with a market capitalization of nearly $9 billion. The company attracted customers with the promise of affordable teeth straightening compared to traditional dentist offices. However, its practices faced criticism from dentists, orthodontists, and the American Dental Association, who expressed concerns about patient safety.
Smile Direct Club responded by filing multiple lawsuits in defense of its do-it-yourself orthodontics approach.
It is also worth noting that the bankruptcy court disclosed that efforts were made until the last minute to explore a potential sale that would keep the company afloat. Unfortunately, all attempts failed, marking the end of the road for the company.
Notably, Smile Direct Club has canceled its lifetime guarantee, along with all outstanding orders for aligners. However, customers enrolled in the SmileyPay Plan are still expected to fulfill their monthly payments until the total amount is paid, per the terms of the SmilePay program.
The company informed customers seeking refunds that more information would be provided soon, as the bankruptcy process would determine the next steps and additional measures customers can take.
The company owed nearly $900 million in debt when it declared bankruptcy, as per The New York Times. Customers who have any questions regarding the recent update can call HFD at 1-877-874-3877 or email [email protected].
