Loot Crate Bankruptcy
Loot Crate files Chapter 11 bankruptcy. Loot Crate admits it owes more than $30M in debt and $20M in unpaid subscriptions.
Loot Crate, a monthly subscription delivery company for memorabilia, is known as “America’s Fastest Growing Company”. It filed for Chapter 11 bankruptcy. It has pledged to complete any orders that have not been paid.
Loot Crate was founded in Los Angeles by Matthew Arevalo (2012). It was a huge success for video game enthusiasts. But, unfortunately, the initial success of Loot Crate led to the creation of hundreds upon hundreds more imitation businesses that flooded the market over the years with low-quality goods and high-priced T-shirts.
Loot Crate has over 250,000 members monthly. It is funded by Robert Downey Jr’s venture capital firm Downey Ventures. Loot Crate has had difficulty staying profitable in the past few years and has plans to sell itself off to Loot Crate Acquisition LLC to fulfill its shipping obligations. Money Chest LLC, a Loot Crate lender and investor, is also known as Money Chest LLC.
Loot Crate has filed a Chapter 11 petition. One month after 150 warehouse workers were fired and one week after, another wave left Loot Crate, which now has 60 full-time employees. Gizmodo reports
An ex-employee of Twitter said that firings were done without prior notice and that terminated workers did not receive severance pay.
Chris Davis, LootCrate CEO and Co-Founder, stated that the company is happy with its operational efficiency achievements. He acknowledged that the company’s achievements from an operational efficiency standpoint were pleasing. However, normal operations will continue as they were before bankruptcy proceedings began. He stressed that workers would still be paid as normal.
Loot Crate was an innovator in online merchandise subscriptions. It is easy to compare Loot Crate with Toys “R” Us, which closed but reopened recently. The company was initially successful, but it slowly declined over time as other companies emerged around it.
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