Stamford, Connecticut – Chicken Soup for the Soul Entertainment Inc., a company known for its self-help books, film, and television content, has filed for Chapter 11 bankruptcy protection in Delaware to address its heavy debt load. The filing, made late Friday, revealed that the company has assets and liabilities of at least $500 million each, giving it the opportunity to continue operating while developing a plan to repay creditors.
The decision to file for bankruptcy came after Chicken Soup for the Soul Entertainment struggled to meet its financial obligations, particularly after acquiring DVD rental company Redbox in 2022. The purchase came with a significant amount of debt, which Chairman William J. Rouhana Jr. stated would have been manageable if the company could take advantage of the resurgence in movie releases post-pandemic. However, the company faced challenges obtaining additional funds from lenders, leading to cash flow shortages and operational inefficiencies.
With plans to sell off certain business units and restructure others, Chicken Soup for the Soul Entertainment aims to use the bankruptcy process to navigate its financial difficulties. The company has secured $20 million in new debt to support its Chapter 11 proceedings. Despite its financial struggles, the company still operates a network of 24,000 Redbox DVD rental kiosks in the United States and owns Crackle, a free streaming service supported by advertising revenue.
Established in 1993, the Connecticut-based company initially focused on publishing feel-good books before expanding into film and television production and video streaming services. It also diversified its offerings by introducing a line of premium pet food. Chicken Soup for the Soul Entertainment became a publicly traded company in 2017, reflecting its growth and evolution over the years.
A spokesperson for the company declined to provide further comments beyond the details outlined in the court filings. The bankruptcy case has been assigned docket number 24-11442 in the US Bankruptcy Court for the District of Delaware. The company’s future plans and restructuring efforts will be closely monitored as it navigates its financial challenges and works towards sustainable operations in the future.