Former Loot Crate files adversary proceeding against asset purchaser

By Sarah Lizee

Olympia, Wash., Feb. 3 – Old LC, Inc., formerly Loot Crate, Inc., filed an adversary proceeding against asset purchaser Loot Co., formerly Loot Crate Acquisition LLC, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware.

The company said that because the purchaser hasn’t followed through with its agreement to pay prepetition sales taxes, which was a fundamental component of the purchase price in the transaction, the debtors are seeking specific performance, damages for breach of contract, equitable subordination, and related relief.

The company also said that because the purchaser intends to transfer part or all the business it acquired from the debtors to one or more affiliates, seemingly to protect itself against a judgment in favor of the debtors, the debtors are seeking to avoid and recover fraudulent transfers by the purchaser.

Old LC said that as a result of the material breaches of the purchase agreement, the debtors’ damages may exceed $3.5 million, which includes expenses, costs and past due sales tax payments.

Los Angeles-based Loot Crate sells pop culture subscription boxes. The company filed bankruptcy on Aug. 11, 2019 under Chapter 11 case number 19-11791.

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