If you're one of thousands holding onto redeemable 'flooz' digital dollars and hope to receive reimbursements in the company's bankruptcy liquidation, don't hold your breath.

According to documents in the case, about 325,000 individuals and 300 corporate customers collectively hold $12.9 million in the redeemable currency but have no chance of turning their flooz certificates into greenbacks since their claims don't rank high enough in the creditors' pecking order.

Flooz.com filed for Chapter 7 bankruptcy on August 31, listing creditors' claims in the vicinity of $12.9 million, made up of mostly individuals who hold the Web gift certificates; $1.9 million of that claim is from corporate customers.

Once the company's assets are sold off and secured creditors get what they can get back, it appears nothing will be left to reimburse Flooz users who had money in their Web accounts when the company suddenly shut down in August.

In a notice to customers, trustee Hal Hirsch said: "At this time, there does not appear to be any property available to the Trustee to pay creditors. You therefore should not file a proof of claim at this time."

Also likely holding the bag are the company's investors. Since its launch in 1999, Flooz.com raised more than $50 million from investors like NBC, Oak Investment Partners, Brentwood Venture Capital and Silicon Alley Venture Partners (SAVP), largely in return for equity, which is essentially wiped out when a business files to liquidate.

Flooz, the Silicon Alley start-up that once counted comedian/actor Whoopi Goldberg among its cheerleaders, is preparing to sell its assets -- brand name, intellectual property and customer list -- in a bankruptcy auction next month.

The company said its customer list was its most valuable asset. Given that the flooz is likely valuable only to a limited group of Internet retailers, the court trustee is now targeting e-commerce vendors who might be interested in acquiring the assets.

LATEST NEWS

Google Earns High Marks for Super Bowl Ad
Investors Unimpressed With NetSuite's Q4
Facebook Says Adios to Microsoft Banner Ads
Why Red Hat Had to Pull the Plug on Exchange
Xfinity Name Get Early Thumbs Down: Survey

Flooz executives, including CEO Robert Levitan, have been retained to assist in the asset sale.

The documents paint a partial picture of a dot-com in distress, detailing the company's business model and confirming, for the first time, that "large-scale fraud" was partly to be blamed for its demise.

During last year, for example, Flooz sold approximately $25 million in the Web currency but only collected $3.4 million in recognized revenue in commissions on those sales. Then, earlier this year, a reduction in spending by the company's largest corporate clients led to severe financial reversals.

Flooz said an upswing in Flooz purchases in the days leading up to Mother's Day raised suspicions of fraud and the credit card partner, Chase Merchant Services (CMS) immediately launched an investigation.

"In conjunction with CMS, (Flooz) determined that thieves had obtained stolen credit card numbers and had purchased significant sums of flooz." It said the FBI joined the investigations, with revealed that more than $146,000 in fraudulent charges were made. Flooz said the thieves exploited a loophole in its credit card approval process, which only checked credit cards for purchases over $150.

"Through trial and error, the credit card thieves determined that threshold and, in the days leading up to Mother's Day, began charging hundreds and thousands of dollars with purchases of $149 or less."