Keto Ice Cream Maker Bankrupt After $23.8M Ruling
Keto Ice Cream Maker Bankrupt After $23.8M Ruling
The News
Rebel Creamery, the Utah maker of low-carb ice cream sold at Walmart, Target and Kroger, has filed for Chapter 11 bankruptcy after a federal judge ordered it to turn over $23.785 million in profits to New York rival Van Leeuwen for copying its packaging.
The filing landed Aug. 14 in the US Bankruptcy Court for the District of Utah, according to the New York Post and IBTimes. Rebel listed between $10 million and $50 million in both assets and liabilities.
Chapter 11 does not mean the pints disappear from freezer cases. It lets the company keep operating while it restructures under court supervision.
Timeline
Van Leeuwen is founded in New York City by brothers Ben and Pete Van Leeuwen and Laura O'Neill, starting with a yellow ice cream truck.
The pair open their first shop in Greenpoint, Brooklyn. The chain now has roughly 100 scoop shops across the US.
Van Leeuwen introduces the packaging at the center of the case: monochrome pastel cardboard pints, matching lids, minimalist design and black script lettering.
Rebel Creamery is founded in Utah.
Rebel's pints start appearing in grocery stores. A Van Leeuwen employee spots them later that year or in early 2019, according to court documents.
Van Leeuwen sues Rebel, alleging deliberate copying of its pint design.
After a bench trial, US District Judge Eric Komitee finds Rebel liable for trade dress infringement, unfair competition and dilution, orders it to stop selling the infringing pints and redesign them, and awards Van Leeuwen $23.785 million in disgorged profits.
Rebel files a notice of appeal challenging the judgment.
Rebel files for Chapter 11 in Utah, listing Van Leeuwen as an unsecured creditor with a disputed $23.785 million claim.
Reactions
Komitee was blunt about what he saw at trial. "The evidence at that trial left no doubt that Rebel infringed and diluted Van Leeuwen's trade dress and did so intentionally," he wrote.
"As a result, Rebel will be enjoined from selling the infringing products and required to redesign its packaging to avoid any further infringement," the judge wrote, adding that "Van Leeuwen is entitled to $23.785 million of Rebel's profits from selling infringing ice cream pints."
Rebel denied the allegations throughout the case, arguing its founders had never seen Van Leeuwen's packaging when they designed their own. The court rejected that account, with Komitee finding Rebel's testimony about its design process fabricated and the resemblance between the two brands unlikely to be coincidence.
What's Next
Two fights now run at once: the Chapter 11 reorganization in Utah bankruptcy court and Rebel's appeal of the $23.785 million judgment.
The bankruptcy filing triggers an automatic stay that generally blocks creditors from collecting pre-bankruptcy debts without the court's permission. Van Leeuwen's claim is listed as disputed because of the pending appeal.
It does not automatically wipe out the separate injunction over Rebel's packaging. Per IBTimes, the precise effect of the bankruptcy on that order and on the appeal will depend on further proceedings in the bankruptcy and appellate courts.
How much creditors ultimately recover — and whether Rebel reorganizes successfully — remains unresolved.
More
The award was not a calculation of Van Leeuwen's lost sales. It was disgorgement: the profits Rebel earned selling the infringing pints, which puts the focus on the infringer's gains rather than forcing the rival brand to prove every sale would have been its own.
Komitee also cut the figure. He reduced the amount attributed to Rebel's infringing sales by 33 percent, finding that factors unrelated to the packaging — including broad demand for ketogenic products — drove part of the company's business. What was left was $23.785 million.
Both brands were among the fastest-growing ice cream labels in 2025 by year-over-year growth, according to Instacart data cited by the New York Post.
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