SmileDirectClub is closed after filing for bankruptcy

SmileDirectClub, a telehealth company that sold teeth-straightening devices through the mail and drew criticism from medical groups, said Friday it had closed.

The company, founded in 2014, sold teeth aligners online and in stores for $1,850. It marketed them as a faster and cheaper alternative to braces. When SmileDirectClub’s IPO in 2019, it was valued at $8.9 billion.

SmileDirectClub has served more than two million customers in almost ten years. But the company was unprofitable and filed for bankruptcy in September with nearly $900 million in debt, according to court filings and financial statements. And this year it settled a lawsuit from the District of Columbia attorney general’s office that accused the company of using confidentiality clauses to stifle consumer criticism.

On Friday SmileDirectClub said on its website that it immediately ceased its global operations. It apologized to customers for the inconvenience and urged them to consult a doctor or dentist about future treatments.

Outstanding orders have been canceled, the company said. Customers on a monthly payment plan are expected to continue making all their payments. Those who complete the treatment are no longer eligible for the free adjustments the company had guaranteed.

For customers seeking refunds, SmileDirectClub said it would have more information “once the bankruptcy process determines next steps.”

SmileDirectClub was founded in Nashville by childhood friends Alex Fenkell and Jordan Katzman. To order the products, customers made a mold of their teeth at home with a kit sent by the company, or had their teeth scanned at a “SmileShop” store. The scans have been assessed by dentists and orthodontists from the company network.

SmileDirectClub’s services, which did not require in-person visits, were criticized by dentist and orthodontist groups. The company has sued some of these critics, accusing the California Dental Board of stifling competition.

After going public, the company’s shares traded for around $18 each, but later became a penny stock. Failing to turn a profit, the company also faced legal battles and dissatisfied customers throughout its existence who accused it of false advertising and of violating Food and Drug Administration regulations.

SmileDirectClub offered refunds within 30 days of the aligners arriving, but anything after that was considered outside the company’s official refund policy and came with a confidentiality provision, The New York Times reported in 2020. The agreement prohibited customers from telling others about the refund and required them to remove negative posts and reviews on social media.

The District of Columbia Attorney General’s Office sued the company in 2022, accusing it of preventing customers harmed by its products from filing complaints with regulators or law enforcement agencies. Under a settlement to resolve the lawsuit earlier this year, SmileDirectClub was required to release more than 17,000 customers from the agreements and pay $500,000 to the district. The company said in the settlement that it had not violated the law and had not engaged in unfair or deceptive practices.