Nerd subscription box firm Loot Crate has filed for Chapter 11 voluntary bankruptcy in Delaware, with an investor stumping up cash to keep the company afloat in the aftermath.
Money Chest LLC has committed "up to $10m" in a bankruptcy loan to keep the firm operating, according to a press release, and has bought all of Loot Crate's assets via the newly-formed Loot Crate Acquisition LLC.
Loot Crate has said that this cash, combined with existing revenue streams and cost-cutting should be enough to keep its head above water. Said cost-cutting includes 50 people losing their jobs last week, following the 150 Loot Crate employees whose roles were terminated in May of this year.
Per reporting from the LA Times, Loot Crate's money woes have been on the horizon for some time. In 2017, the company defaulted in a loan from Breakwater Management, digging itself out of that hole by bringing in a... $21m load from Atalaya Capital. Money Chest has bought that loan in addition to the aforementioned $10m.
"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," Loot Crate co-founder and boss Chris Davis (pictured) said.
"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."
He continued: "During the sale process we will have the financial resources to purchase the goods and services necessary to fulfill our Looters' needs and continue the high-quality service and support they have come to expect from the Loot Crate team."