From ThresholdRPG Wiki
This command can only be used in a party of at least 2 people. When used by a member of the party, this command will automatically loot a corpse in the area. It will then broadcast the items found to every member in the party. Providing a target is optional and is generally useful only when there are multiple corpses or a dead body that is not a "corpse" (like a pile of bones).
The party leader can enable options like automatic splitting of loot items (but coins are never split- they always go to whoever used the loot command), automatic burial of corpses, and the way corpses are buried in the group.
The Party system has further information on the different splitting options.