The collapse of Congo Brands, the Australian company behind KSI and Logan Paul’s Prime drinks, and a lawsuit involving Selena Gomez’s Wondermind venture have prompted scrutiny of celebrity-backed businesses: When a venture runs into trouble, who is legally responsible. The company entered administration with US$7.92 million in unpaid bills and just $85,000 in cash.
Investors in Wondermind have sued Selena Gomez, alleging she failed to deliver on commitments to promote and help build the mental health platform. Gomez’s representatives have dismissed the claims as meritless.
Charlotte Hale, practice leader at commercial law firm LegalVision, said incorporating a company generally separates a business’s debts from a celebrity’s personal assets. That protection matters because a brand may trade on a celebrity’s name while the legal liability sits with the company.
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Hale said that distinction could be relevant to Congo, and whether KSI and Logan Paul could face personal financial or legal exposure would depend on their formal roles and how involved they were in the company’s operations and decision-making. Fame does not create liability by itself, but conduct and legal role can.
A celebrity’s association with a brand does not make them responsible for the debts of a company that enters administration. Hale also noted that problems arise when the commercial reality does not match the label. A person called an ‘ambassador’ may be making founder-level claims. A ‘co-founder’ may have no operational control. Those distinctions should be documented before launch.
Celebrities like KSI and Logan Paul may not be personally liable for the debts of Congo Brands, but they could still face reputational damage if the company’s collapse is linked to their involvement.
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The same principle applies to social media. Hale said promotional posts may appear informal, but they can still create legal exposure when they form part of a commercial arrangement. Businesses should not assume a social post is low risk because it feels casual.
Congo Brands is just one example of a celebrity-backed business that has run into trouble. The company’s collapse has left many wondering who will be held responsible for its debts. As Hale noted, the answer will depend on the formal roles and involvement of KSI and Logan Paul in the company’s operations and decision-making.
