Fanatics, an online sports apparel retailer, has settled and dismissed its lawsuit against troubled payment processor Bolt, according to court documents obtained by TechCrunch.
The settlement unfolded while Bolt was in the midst of a bold effort to secure significant funding, coinciding with founder Ryan Breslow’s bid to reclaim the CEO role. Bolt’s response did not immediately address the outcome of the lawsuit. Fanatics remained silent on the matter.
Bolt’s strategic alliance with Fanatics was just one of several notable successes celebrated by CEO Maju Kuruvilla and President Breslow in March 2022.
By August 2023, tensions between the partners had escalated, prompting Bolt to inform Fanatics that they would be ending their agreement, according to the court documents. Despite Fanatics’ refusal to accept the terms of Bolt’s contract cancellation, they instead opted to file a lawsuit seeking compensation for what they perceived as Bolt’s unpaid financial commitments.
The swimsuit, reviewed by TechCrunch, was heavily edited out, rendering unknown the exact monetary figures and the nature of allegations made against Bolt by Fanatics, which are now shielded from public view. The investment of thousands upon thousands of dollars by Bolt into a marketing fund, as reported in March, had the potential to drive significant revenue for Fanatics through their partnership. Bolt, having contributed $12 million to the fund, was subsequently pursued by Fanatics for an additional $50 million, according to reports. According to unredacted components of the lawsuit, Fanatics alleges that Bolt exploited knowledge gained from their partnership to secure business from rival retailers and sway investors into making investments. Months before Breslow and Kuruvilla embarked on their media tour to promote the Fanatics partnership, they had already announced the collaboration.
One prominent retail chain did sue Bolt, however. Another prominent investor joined the fray, alongside the initial major buyer, securing the swimsuit deal that ultimately transformed ABG into a significant stakeholder in Bolt.
Since touching down at a valuation of nearly $11 billion in 2022, Bolt has found itself entangled in numerous controversies. It was announced that the company’s founder, Breslow, will step down as CEO in early 2022 following allegations of violating safety and legal guidelines during his last fundraising effort for the corporation. After leaving the corporation, Kuruvilla departed as litigation unfolded with Fanatics filing a lawsuit. Breslow’s financial entanglements deepened further as he struggled to reconcile his obligations with Activant Capital, a significant investor who had lent him $30 million through a mortgage on the corporation. The dispute was eventually resolved with Breslow’s agreement to replenish the funds and the corporation’s commitment to strengthen its oversight mechanisms, as reported in May.
Bolt, a fintech leader, stunned the industry last month by announcing its intention to raise $200 million in equity and an additional $250 million in “advertising credit” at a whopping $14 billion valuation. To achieve this valuation, Bolt is reportedly pressuring existing shareholders, threatening to compel them to contribute more capital by purchasing additional shares at the revised value, effectively risking dilution of their stakes if they fail to comply with a 1-cent-per-share buyout offer. The effort by Breslow to reclaim his role as CEO was a key aspect of the latest funding round’s details.
Despite this, major players such as BlackRock are unlikely to respond adequately to the threat. Meanwhile, Bolt has struck a brand-new deal with Silverbear Capital. While Silverbear wasn’t overly invested in the partnership, it was driving the deal forward with a specific goal-oriented vehicle managed by a private equity fund based in the United Arab Emirates.
As turmoil swirls around Bolt’s boardroom, fueled by looming legal action and high-stakes drama, a crucial chapter – the Fanatics lawsuit – appears to have reached a conclusion.
