Flooz.com Closes, Files for Bankruptcy Protection

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Saying it has been "adversely affected" by the faltering economy, online payment service Flooz.com Inc. in a note on its Web site yesterday said it is filing for bankruptcy protection.

"We regret to inform you that Flooz.com Inc. has ceased operations," the note reads. "The offices are closed and the company will file for bankruptcy protection."

No one at Flooz.com was available for comment.

Flooz.com's Web site also noted that the company had been in merger talks with unnamed companies, but "was unable to find a suitable partner."

According to an article in the online edition of The New York Times, the company may have been the victim of fraud. The newspaper cited an unnamed source who said Flooz.com unknowingly sold $300,000 of its online currency, called flooz, to a ring of credit card thieves in Russia and the Philippines. The paper noted that stolen credit cards were used to buy the currency.

Earlier this month, BarnesandNoble.com, Tower Records, Outpost.com, iGadget.com and Ashford.com removed their links to Flooz.com and stopped accepting the company's currency as payment.

The company's flooz gift currency was bought online with a credit card and sent with a personalized e-mail. Recipients could either spend their flooz at 30 online retailers, including MarthaStewart.com, J&R Computer World and JCrew.com, or save it in an account.

Robert Levitan, co-founder and former executive at iVillage.com, a Web portal geared toward women, founded Flooz.com in March 1999.


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