Even though Karmaloop founder Greg Selkoe has moved on to new ventures, the investment mistakes he made with the streetwear retailer are still haunting him. Last year when Karmaloop filed for bankruptcy it owed $29 million dollars and a large chunk of that, $5 million to be exact, Selkoe had personally agreed to pay, according to The Boston Globe.
To make matters worse, in August his former lender Comvest Capital II sued him for the full amount, claiming a breach of contract.So far, Selkoe has had to liquidate his retirement accounts and sell his wife's engagement ring to help cover the debt.
“If I had two pennies, they would come after me even if it meant taking food out of my kids’ mouths,” Selkoe told The Globe.
Although the companies failings have often been attributed to Selko's bad business decisions, hehas claimed in court filings that it was that Comvest drove the company to bankruptcy, since the site wasn't receiving enough cash to expense its expanding ventures. Selko wanted to make Karmaloop a cultural hub that included things like a television channel that would have had Pharrell Williams as the creative director. It never actually aired, but it still cost the company $14 million.
Kanye West and Dame Dash had expressed interest in buying the company out of bankruptcy, but when bidding for Karmaloop opened there were no offers. So, Comvest and another lender, CapX Partners, bought Karmaloop for $13 million. Soon after, Selkoe was ousted as the CEO of the company that he started in 1999 and was left with millions to pay off.