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The U.S. Trustee’s push to end Loot Crate’s long-running chapter 11 is now set for an April 22, 2025 hearing, with objections due April 15, after the court notice moved the hearing from April 14 and reset the response deadline in the rescheduled hearing notice. That matters because the underlying motion seeks conversion to chapter 7, or dismissal in the alternative, rather than another incremental case-management step.
In the conversion motion, the U.S. Trustee says the debtors have been in chapter 11 for nearly six years, sold substantially all assets in October 2019, ceased operations, never filed a plan or disclosure statement, and are administratively insolvent. The motion cites about $3.9 million of unpaid professional fees, $3.3 million of priority sales taxes, and cash that fell from about $3.64 million in April 2023 to about $3.52 million in December 2024. Conversion would put remaining cash under a chapter 7 trustee and priority-scheme distribution process; dismissal would remove court oversight of that final wind-down.
Loot Crate opened Chapter 11 in Delaware as a four-debtor group built around Loot Crate Parent, LC Funding, Loot Crate Holdings, and operating company Loot Crate, Inc. The debtor described a Los Angeles e-commerce subscription business selling monthly “geek and gamer” merchandise boxes, with more than 32 million crates shipped since 2012 and roughly 60 full-time employees. The filing followed a liquidity spiral: high marketing and fulfillment costs, sales-tax pressure after Wayfair, delayed shipments, customer chargebacks, and Vantiv’s planned August 12, 2019 termination of card processing. At filing, the debtor cited more than $20 million of paid but unshipped customer orders, more than $30 million of trade debt, an estimated $5.87 million sales-tax liability, a $21 million Midtown Madison term loan, and $4.4 million of convertible subordinated notes including Money Chest LLC paper source filing.
The opening strategy was an accelerated going-concern sale funded by Money Chest, which proposed a $10 million DIP facility to Loot Crate, Inc., guaranteed by the holding-company debtors, with sale-linked maturity triggers and authority for Money Chest to credit bid prepetition or postpetition claims source filing. The sale motion identified Loot Crate Acquisition LLC, a Money Chest affiliate, as the proposed stalking horse path and set an expedited timetable with a September 10 bid deadline, September 12 auction, and September 16 sale hearing source filing. The posture was clear from day one: preserve subscription operations long enough to transfer substantially all assets rather than pursue a standalone reorganization.
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