The other day, when I heard the news, I mentioned to a friend that a former client of our firm had filed. My friend, a private equity investor and former securities lawyer, asked if it was a good filing, i.e., for an IPO, or a bad filing--neither of us wanted to say the word.
In fact, LoveSac, a client for whom we helped raise almost $12 million of private equity, venture capital and angel financing in 2005, filed for bankruptcy protection under chapter 11 earlier this week. I count founder Shawn Nelson as a friend--as I do the investors. I can only imagine how hard this is for him, knowing how his friends, family and "angel investors" are being impacted.
I have told the shareholders with whom I have communicated and that we had encouraged to invest in the deal, that no one was more disappointed than I by this outcome. I've also expressed my hope that the company can use bankruptcy to successfully restructure and preserve value for shareholders.
I am not privy to any inside information, have not had communication with the company and don't intend to comment after tonight on this topic.