Gamer and Geek fans are getting some bad news today with the announcement last night that popular subscription box service Loot Crate has filed for Bankruptcy protection.
According to Bloomberg, the company, which has over 250,000 subscribers, is in “dire financial straits”. Loot Crate was founded in 2012 and reportedly defaulted on a loan from Breakwater Management LP in 2017. They were able to refinance due to a $21 million dollar loan from Atalaya Capital in August 2018.
Currently, Loot Crate’s credit card processor is withholding customer billings, preventing Loot Crate from shipping goods tied to $20 million dollars in sales and is behind more than $5.8 million dollars in sales tax. The company also owes more than $30 million dollars in trade debt according to Chief Restructuring Officer Stuart Kaufman, who filed a court declaration in Wilmington Delaware.
The company has already shut down a warehouse, paying off 150 workers and dismissed 50 employees last week leaving the company with 60 current employees. Money Chest LLC has purchased the previous loan and agreed to provide a $10 million dollar bankruptcy loan to the company.
According to Loot Crate CEO Christopher Davis; “Daily operations will continue as usual,” he said in a statement. “Crates will be shipped, and all aspects of the business will go on as before the Chapter 11 filing.”
Are you a current or former Loot Crate subscriber? Let me know what you think in the comments below.