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Loot Crate Agrees to be Acquired, Company Receives Commitment for New Financing
August 19, 2019
Source: PR Newswire
Loot Crate, the worldwide leader in fan subscription boxes, announced today that it has reached a definitive agreement for the sale of substantially all of its assets to Loot Crate Acquisition LLC. To facilitate the transaction, Loot Crate and its affiliates today filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in Wilmington, Delaware. The terms of the agreement will be formalized and submitted to the Court later this week.
In accordance with Section 363 of the U.S. Bankruptcy Code, other companies will have an opportunity to submit competing offers for the assets. The Company expects the sale to be completed within 45 days.
Loot Crate has taken significant steps toward financial health by reducing costs, capital expenditures and working capital needs, and looks forward to the benefits of new ownership.
"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," said Loot Crate's Chief Executive Officer 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 Looters (customers) and employees."
Loot Crate received a commitment for up to $10 million in new financing from Money Chest LLC, an investor in the company. These funds coupled with ongoing revenue from subscriptions will be used to maintain normal operations. "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," Mr. Davis said.
Mr. Davis also emphasized that employees and customers should not notice any difference in operations as a result of the filing or during the sale process except for the better. "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.
"This transaction represents good news for our employees, our customers, and our other constituents. It will provide Loot Crate with greater access to the financial resources necessary to continue to prosper and grow. By utilizing the Chapter 11 process, we are able to ensure an expedited and orderly transition," Mr. Davis concluded.
Loot Crate filed its voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware in Wilmington.
About Loot Crate
Founded in 2012, Loot Crate™, Inc. is the worldwide leader in fan subscription boxes. Loot Crate partners with industry leaders in entertainment, gaming, sports, and pop culture to deliver monthly themed crates, produce interactive experiences and digital content, and films original video productions. Since 2012, Loot Crate has delivered more than 32 million crates to fans in 35 territories across the globe.
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