Loot Crate Declares Chapter 11 and is Looking to be Acquired
Loot Crate has announced they are declaring Chapter 11 and are being acquired. The proposed buyer is Loot Crate Acquisition LLC which is an affiliate of an existing investor, Money Chest LLC. The geek box provider has also announced they are receiving immediate financial support from Money Chest.
As part of the sale agreement, Loot Crate is filing for chapter 11 reorganization. That allows the company to build a plan to keep its business alive and pay creditors over time. The company ships to more than 250,000 recurring subscribers.
It’s been clear the company has been having issues lately as boxes have slipped from their intended ship date and communication has been scarce.
The company’s finances are in trouble as their credit-card processor is withholding customer billings, they haven’t shipped boxes coming out to about $20 million in sales, and owe more than $30 million in trade debt. The company also owes more than $5.87 million in sales tax.
The news comes after it fired around 50 people last week. They currently have about 60 full-time employees.
This isn’t the first time the company has had money troubles. Founded in 2012, the company defaulted on a loan in 2017 but was able to refinance it with a $21 million term loan in August 2018. Money Chest LLC has purchased that loan and will provide additional financing with the $10 million loan.