Loot Crate was once the go-to company for monthly shipments of geek and gamer gear, but now its stock has run dry. The company is filing for bankruptcy and has laid off dozens of employees, on top of the 150 warehouse workers who were let go last month. Loot Crate plans to ship all remaining boxes to customersbut given how behind it already is, it seems like a tough promise to keep.
In a press release released overnight, Loot Crate announced plans to file for Chapter 11 bankruptcy. Reports of financial troubles have been circulating for awhileincluding defaulting on a $21 million loan in 2017even though Loot Crate has about 250,000 subscribers. The plan is to try and sell the company, with one of its investors, Money Chest (who will set the initial auction bid), funneling a $10 million bankruptcy loan to keep operations afloat in the interim.
The bankruptcy filing and overall financial woes have devastated the companys workforce. Last month, Loot Crate closed its warehouse and laid off 150 workers, announcing plans to outsource to a third-party logistics company. An additional 50 employees were laid off last week, leaving the company with just 60 full-time workers. Reports have since surfaced on Twitter that employees were let go without any severance or benefitssomething Toys R Us recently faced backlash for, resulting in a $20 million severance fund for its 30,000 former employees.
Co-founder Christopher Davis promised in the press release that Loot Crate subscribers should expect no changes. Daily operations will continue as usual, unique and exciting fan items will be purchased, crates will be shipped, and all aspects of the business will go on as before the Chapter 11 filing. Our employees will continue to be paid as usual during this transaction, he said. Thats a pretty hard sell, as it hasnt been business as usual at Loot Crate.
According to the bankruptcy filing (as reported by the L.A. Times), the company has been withholding customer billing and still owes at least $20 million worth of shipments to customers. Some subscribers report not having received subscription boxes in the past three months. io9 Deputy Editor Jill Pantozzi, who receives a courtesy subscription for media, says the last shipment that arrived was the May Nemesis box. There have also been complaints of repeat items, lack of interesting exclusives, and boxes filled with disappointing goods.
Fallout 4 fans may end up feeling especially frustrated. If Loot Crate fails to fulfill all of its missing shipments, folks who subscribed to the six-part Fallout Series 2 set (which costs about $228) in hopes of getting a complete Liberty Prime set...could end up never receiving its head.