Does Thrasio Owe You Money from Purchasing Your Amazon Based Brand or Business?

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Thrasio Bankruptcy after Buying Amazon Businesses

Thrasio, a prominent buyer of Amazon based brands and Amazon based businesses from Amazon Sellers, filed for Chapter 11 bankruptcy protections and bankruptcy reorganization. 

The Amazon Sellers who sold their Amazon based businesses and the Amazon Sellers who sold their Amazon based brands are likely going to be considered “unsecured creditors” in Thrasio’s bankruptcy.


Thrasio Holdings Inc.: A Brief Overview

Thrasio became a player in the Amazon FBA (Fulfillment by Amazon) ecosystem by purchasing many Amazon Sellers’ businesses.  Thrasio was one of the largest “aggregators” of Amazon based businesses and Amazon based brands built by countless Amazon Sellers.

Before the Thrasio bankruptcy, Thrasio’s business model revolved around acquiring and managing various third-party Amazon sellers and the Amazon based brands Thrasio purchased.  

Thrasio’s filing for bankruptcy under Chapter 11 of the US Bankruptcy Code raises concerns and uncertainties among all of the Amazon Sellers that sold their Amazon based brands and their Amazon accounts to Thrasio before it filed for bankruptcy.  


The Chapter 11 Bankruptcy Filing

Thrasio’s bankruptcy filing will allow it to reorganize its Amazon based business and Amazon based brands with a recognition if its debts and, hopefully continue its operations by selling products, on Amazon.  This process generally involves creating a plan to repay creditors while maintaining the business’s viability.


Unsecured Creditors’ Rights in Thrasio’s Bankruptcy

Unsecured creditors, including the Amazon Sellers who sold their Amazon based brands and their Amazon seller accounts, are similar to vendors and suppliers who provided goods or services to Thrasio without any collateral, are in a precarious position.

Unlike “secured” creditors, who have a claim on specific assets, unsecured creditors like the Amazon Sellers who are owed money for earn-outs are at the bottom of the creditor ladder.


The Role of Amazon Merchants in Thrasio’s Bankruptcy

As Thrasio’s bankruptcy works its way through the bankruptcy court, the fate of Amazon merchants acquired by the aggregator is precarious.


Adapting to the Changing Amazon Marketplace

Thrasio’s bankruptcy filing serves as a reminder of the inherent risks associated with selling products on Amazon including the increased costs and fees to successfully sell products on Amazon.  

Also, Thrasio’s bankruptcy also reminds Amazon Sellers that if they are selling their businesses or their brands, that should obtain as much money as possible up-front and not overly rely on earn-outs or other future payment plans.  Amazon Sellers may want to start including provisions in their sale agreements that mandate the return of the assets if the buyer files for bankruptcy or otherwise becomes insolvent.

Click here if your business or brand was affected by the Thrasio Bankruptcy!