What just happened? Loot Crate started in 2012 and provides subscribers with a curated selection of geek- and gaming-related merchandise. This week, the company filed for Chapter 11 bankruptcy protection and is looking to sell its assets to a new owner.
In an overnight press release, Loot Crate said it has taken significant steps toward financial health by reducing costs, capital expenditures and working capital needs and looks forward to the benefits of new ownership.
Loot Crate CEO Chris Davis said they will have the financial resources to continue to purchase goods and services necessary to fulfill orders during the sale process. "Daily operations will continue as usual, unique and exciting fan items will be purchased, crates will be shipped, and all aspects of the business will go on as before the Chapter 11 filing," he said.
Employees will continue to be paid as usual during the transaction, Davis added.
Davis seems confident but not everyone shares that optimism. According to court documents seen by the Los Angeles Times, the company has more than 250,000 recurring subscribers but is struggling significantly. It reportedly hasn't shipped goods tied to $20 million in sales and owes more than $30 million in trade debt.
Worse yet, some $5.8 million in sales taxes have gone unpaid and around 50 employees were let go just one week ago.
Masthead credit: Hello Subscription