Loot Crate has filed for Chapter 11 bankruptcy.
According to a report from the LA Times, the service had hit a rough patch over the last year or so, in which it found itself short of funds, having failed to hit critical mass with its subscription box concept.
Founded in 2012, Loot Crate rose to popularity amid the rise of the geek culture. Monthly boxes were sent out to subscribers and featured a curated selection of products, spanning clothing, merchandise, figures, limited edition collectables and more.
Its early years traction seemingly trailed off latterly, putting the company is its current position of seeking a buyer to snap them up and start the rebuilding process. In that meantime, with court declaration filed in Delaware, US, the company’s credit card processor is withholding customer billing.
Reports indicate that Loot Crate currently owes more than $30 million in trade debt, while the stemmed service and billing system has denied the company around $20 million in sales.
Prior to its August 12 bankruptcy filing, Loot Crate had axed around 50 jobs.
“We have worked diligently to overcome challenges with our capital structure, along with legacy issues the Company has been struggling with for the past 18 months,” said Loot Crate’s chief executive officer, Chris Davis.
“We are very pleased with our progress from an operational efficiency standpoint, however, the company still faces liquidity issues.
“After careful review of the wide range of available options, management determined that a sale of the Company is in the best interest of all parties, including our valued Looters and employees.”
Davis insisted that daily operations will continue as usual throughout the process.
More as we get it.