LeNature's Inc. and its rapid descent into ruin two years ago offered a grim and telling omen for business forecasters wise enough to recognize it.
That is, the fiscal tsunami that slammed LeNature's into bankruptcy -- an unforgiving force churned by flimsy credit and easy money -- would inevitably flatten similar business plans banked on nothing more substantial than worthless paper and false promises.
Witness the amended lawsuit filed by investors against the Latrobe beverage maker and Wachovia Bank. It's alleged LeNature's executives Gregory Podlucky and Robert Lynn, along with Wachovia officials, pitched the company's astounding growth based on nothing more substantial than grossly inflated sales figures; that for three years positive audits allowed LeNature's to borrow heavily while it advanced toward bankruptcy.
Hedge fund officials on the hook for $275 million allege a pattern of racketeering by LeNature's executives and Wachovia. They're seeking damages that could reach $1 billion. Wachovia says it was "a victim of fraud."
Could Mr. Podlucky's machinations been uncovered by more careful scrutiny• Or were his investors, similar to today's troubled subprimers, not concerned with the nitty-gritty details?
If so, they have themselves to blame.