In the online shopping world, subscription box services have exploded in popularity selling everything from personalized toys and treats for the family pet to coordinated outfits for people who want fashion assistance without the face-to-face interaction with another human being. Loot Crate Inc. specialized in “geek and gamer” boxes filled with clothes, figurines, and other collectible items based on well-known comic books, science fiction, video games, and pop culture. Though boasting over 250,000 subscribers, Loot Crate showed signs of financial trouble as early as 2017 when it was reported the start-up had laid off employees, piled up unpaid bills, and defaulted on a multi-million dollar loan. Though Loot Crate was able to re-finance that loan, the company was still faced with excess inventory, high operating costs, and the growing competition in the subscription service market.
In response to drastic reductions in its office and warehouse workforce and rumors of financial woes, the company announced the voluntary Chapter 11 filing and future plans to sell substantially all of its assets in an August 12 press release. Loot Crate’s CEO Chris Davis assured that the company would fulfill existing orders and continue pay employees. He also expressed his belief that the Chapter 11 process will allow the company “to continue to prosper and grow” and will “ensure an expedited and orderly transition.” The press release also revealed the company received a $10 million bankruptcy loan from one of its current investors, Money Chest LLC to keep the service running in the interim.
‘Geek and Gamer’ Subscription Service Loot Crate Files for Bankruptcy
Loot Crate files for bankruptcy and plans to sell itself
Curran Antonelli represents a broad range of businesses and corporate entities, private equity funds, as well as governmental agencies and other interested parties in all phases of the bankruptcy process and in bankruptcy related transactions and litigation. As advocates and trusted business advisors, our well-established foundation of knowledge and understanding of our clients’ business interests, enables our attorneys to deliver unparalleled individualized attention to our clients of all sizes with their litigation and corporate transactional needs.