LoveSac: Utah's fastest failing company

According to the Salt Lake Tribune, the LoveSac corporation has filed for Chapter 11 Bankruptcy. This comes barely a month into 2006, after the company was ranked among Utah's "top-performing companies" in 2005 by Mountain West Capital Network. They actually secured a patent this year, and claim sole ownership of the word "Sac." I could look up the patent and see what it says, but I prefer to speculate that their entire applications says "bag with foam in it; sewn shut."

In a previous post about LoveSac, I expressed my long-standing bewilderment over the success of LoveSac. It's a bean-bag. How can it serve as the foundation of a multi-million dollar enterprise? Well, it can't. The company's founder, Shawn Nelson, is evidently a powerful illusionist, duping creditors out of millions of dollars to prop up a senseless non-business. The Tribune writes:

If everything went as planned, Nelson had said, he would double the $25 million in sales for 2004 to $50 million in 2005.

On Wednesday, a grimmer reality set in when Bankruptcy Judge Mary Walrath ordered the consolidation of cases of LoveSac Corp. and three of its subsidiaries and affiliates.

Eight Utah companies are listed among the top 30 creditors holding the largest unsecured claims. The Utah firms and other unpaid companies in California, Pennsylvania, Washington, Minnesota, Colorado, Texas, New York and Shanghai, China, provided materials, assembly, fuel and shipping services.

It is unclear what the immediate effect of the bankruptcy filing will be on LoveSac's retail outlets.

While this is only Chapter 11, and doesn't signal the imminent demise of LoveSac, I think the curtain has finally been lifted, revealing the true LoveSac: a corporation as ridiculous as its product.