In a recent development, online sports apparel retailer Fanatics has agreed to settle and drop a lawsuit that it filed against troubled one-click payments provider Bolt in March. According to court documents obtained by TechCrunch, the settlement occurred as Bolt was in the midst of a new fundraising effort, including a "cramdown" threat for its existing investors.
Background on the Partnership
The partnership between Fanatics and Bolt was one of the key wins touted by Bolt’s founder Ryan Breslow and then-CEO Maju Kuruvilla back in March 2022. However, by August 2023, the partnership had frayed to the point where Bolt informed Fanatics that it was terminating the agreement.
The Lawsuit
Fanatics did not agree to the termination on Bolt’s terms and filed a suit seeking to force Bolt to pay up on what it believed were Bolt’s financial contractual obligations. The lawsuit, which was heavily redacted, did not disclose the dollar amounts or specifics of what Fanatics was alleging Bolt failed to do.
Possible Causes for the Lawsuit
It is possible that the lawsuit revolved around millions of dollars that Bolt paid into a fund to market the partnership between Fanatics and Bolt. As reported by The Information in March, Bolt paid $12 million into the fund, and Fanatics was reportedly suing for an additional $50 million.
Bolt’s Response
In an emailed statement attributed to current CEO Justin Grooms, Bolt implied that the settlement involved an ongoing partnership with Fanatics, not the conclusion of it. The statement said: "We value our partnership with Fanatics and remain committed to continue providing them, and all of our customers, with the best-in-class checkout solutions they’ve come to expect from Bolt."
Other Controversies Surrounding Bolt
This isn’t the only big retail partner that sued Bolt. Another marquee customer, Forever 21 owner Authentic Brands Group, sued in April 2022, and the parties later settled the suit with ABG becoming a shareholder of Bolt.
Bolt’s Turbulent History
Bolt has been surrounded by controversy in recent times. In addition to the lawsuit filed by Fanatics, the company has faced criticism over its business practices, including allegations of aggressive debt collection tactics.
Conclusion
The settlement between Fanatics and Bolt marks a significant development in the ongoing saga surrounding the payments provider. As Bolt continues to navigate the complexities of its business, it remains to be seen what the future holds for the company.
Timeline of Events
- March 2022: Bolt announces partnership with Fanatics
- August 2023: Bolt terminates agreement with Fanatics
- March 2024: Fanatics files lawsuit against Bolt
- [Current]: Settlement reached between Fanatics and Bolt
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