SmileDirectClub’s end triggers ADA response

With the sudden closure of SmileDirectClub following a failed attempt to rescue the clear aligner company, the ADA reaffirmed its opposition to direct-to-consumer dentistry due to potential harm to patients, according to an ADA press release dated December 12.

The ADA reaffirmed its policy that a dentist is “ultimately responsible for the patient’s care and is the only individual licensed and qualified to accept responsibility,” according to the release.

The ADA and its membership never want patients to feel left behind and are encouraging SmileDirectClub patients left in limbo when it shut down operations worldwide, including its customer service, on December 8 to seek out local dentists they can visit regularly to continue clear aligner treatment.

Furthermore, SmileDirectClub, which had filed for bankruptcy in September, immediately stopped future sales and canceled outstanding orders for clear aligners and ended its lifetime guarantee, according to the company website. Since its inception, SmileDirectClub has had 2 million present and past patients.

For SmileDirectClub patients left in a lurch, clear aligner provider OrthoFX is offering free consultations and treatment assessments. Additionally, OrthoFX is offering special financing options and flexible payment plans to assist SmileDirectClub patients, as well as having a dedicated support team available to handle their needs and concerns. SmileDirectClub patients can visit OrthoFX’s website.

In early December, after no new buyers came forward to rescue the company, SmileDirectClub founders Jordan Katzman and Alex Fenkell offered to infuse new cash into the business and take it over, to save it from liquidation. They proposed offering $30 million of debt to SmileDirectClub, as well as adding $25 million of new equity into the company, in exchange for the founders receiving 100% of the reorganized business.

For the deal to proceed, SmileDirectClub needed to get its other lenders and creditors to agree to it. When SmileDirectClub filed for voluntary protection under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas on September 29, SmileDirectClub had almost $900 million in debt. SmileDirectClub’s money problems came nearly four years after it raised more than $1 billion in its initial public offering and months after facing some legal challenges.

In August, a California court confirmed an order requiring the orthodontics company to pay $63 million to Align Technology, a former partner and the maker of Invisalign, over a supply agreement dispute. The Nashville, TN-based company had planned to appeal the decision.

In June, it settled a suit with the Washington DC, attorney general’s office, which claimed the company made injured and dissatisfied customers sign nondisclosure agreements (NDAs) to receive refunds for their clear aligner therapy. The settlement required the company to release 17,000 U.S. consumers from provisions in its NDAs. Also, the company had to change its refund policy, notify consumers who previously signed NDAs that they could now freely speak about their experiences, and stop forcing people to sign NDAs that prevented sharing information before refunds were provided.

At the time of its closing, SmileDirectClub was operating number retail shops in more than a half-dozen locations, including the U.S., Canada, Australia, Ireland, Germany, Singapore, and the U.K.

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