Loot Crate, the biggest name in pop-culture subscription boxes, has filed for Chapter 11 bankruptcy to facilitate the sale of all its assets to Loot Crate Acquisition LLC.
The company, which sells subscriptions for parcels of stickers, toys, collectables, apparel and other pop-culture merchandise, has struggled in recent months.
In an effort to stabilise the balance sheet, Loot Crate’s board implemented sweeping cost-cutting and other measures - but admitted new ownership will be key to its future health. The comapny is struggling to keep up with sales tax payments, reportedly owing nearly $6m in arrears, and has failed to ship around $20m worth of goods that have already been sold.
"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. We are very pleased with our progress from an operational efficiency standpoint, however, the company still faces liquidity issues," says Loot Crate CEO Chris Davis.
"After careful review of a wide range of available options, management determined that a sale of the Company is in the best interests of all parties, including our valued customers and employees."
To finance the smooth running of operations during the transaction period, Loot Crate secured $10m in funding from one of its investors, Money Chest.
The chief executive assured subscribers, known as Looters, that the sale will have no impact on their regularly scheduled deliveries.
“Crates will be shipped, and all aspects of the business will go on as before the Chapter 11 filing,” he says.
Employees will also continue to be paid as usual throughout the period.Top image credit: allsubscriptionboxes.co.uk