Fashion rental platform Caastle has filed for bankruptcy as the company plans to liquidate its assets amid fraud allegations and lawsuits.

The company, which allows its customers to rent clothing from partner brands, recently filed for Chapter 7 bankruptcy in Delaware, according to Women’s Wear Daily.

Under Chapter 7, a company closes and sells off its assets to pay creditors. Meanwhile, a Chapter 11 filing allows a company to reorganise while devising a plan to pay off its debts. 

Founded in 2011 and headquartered in New York, Caastle has faced fraud allegations and lawsuits over the past few months.

Last month, law firm Bragar Eagel & Squire launched an investigation on behalf of Caastle investors to determine whether the company has violated the federal securities laws and/or engaged in other unlawful business practices.

The move came after Axios published two stories in March and April accusing former-CEO Christine Hunsicker of financial misconduct and that the board was slow to warn investors about the wrongdoing.

One of the reports mentioned a letter the board sent to investors, which revealed that Hunsicker had provided them with “misstated financial statements and falsified audit opinions, as well as capitalization information that understated the number of company shares outstanding”. 

Hunsicker reportedly resigned from her position shortly after the letter went out.

On April 8, EXP Topco filed a lawsuit against Caastle, accusing the company of breach of a license agreement and a settlement agreement. 

Later the same month, P180 filed a lawsuit claiming that Caastle had induced it to raise capital and take out loans by misrepresenting its financial health. P180 claims it suffered losses upwards of $58 million.