The Los Angeles-based Loot Crate, a subscription box startup offering “geek and gamer products,” filed for Chapter 11 bankruptcy due to cash flow problems, Bloomberg reported on Monday (Aug. 12).
The company specialized in monthly fan boxes filled with shirts, gear and gadgets for the sci-fi and gaming culture, Chief Restructuring Officer Stuart Kaufman said in a court declaration filed in Wilmington, Delaware.
Court papers show the company had more than 250,000 recurring subscribers, the news outlet reported.
Cash flow issues have put the company in a precarious financial position, with $20 million worth of unshipped merchandise and $30 million in debt. Kaufman said the company also owes more than $5.87 million in sales taxes. Its credit card processor is also withholding customer billings.
The firm defaulted on and then refinanced a 2017 $21 million loan that was recently purchased by Money Chest, who gave Loot Crate a $10 million bankruptcy loan.
Christopher Davis launched Loot Crate in 2012 and maintains an interest of just over 50 percent. A collectible company associated with Money Chest will act as the stalking horse bidder for Loot Crate, Kaufman told Bloomberg.
About 50 people were laid off earlier this month with roughly 60 full-time employees left behind as the company looks for a quick sale, the news outlet said.
When Loot Crate launched, its vision was to “bring the Comic Con experience directly to your doorstep.” The team was made up of avid pop culture denizens who aimed to stay on top of trends and ahead of any retail experience, constantly polling their customer base to determine what to look out for. They also worked with 200 licenses in order to deliver the brands and retail products subscribers wanted, and worked directly with partners to develop and secure products for their boxes.