Los Angeles, California – Chicken Soup for the Soul Entertainment, the owner of Redbox, has filed for bankruptcy protection. This follows a series of financial struggles for the DVD rental company, including loan defaults, car repossession orders, and missed payrolls for employees.
The company notified employees of the filing through an email, explaining that they had applied for a debtor-in-possession loan to secure additional working capital. This loan would help meet payroll as the company goes through restructuring after the bankruptcy filing.
With employees reportedly waiting for paychecks since June 21st, Chicken Soup for the Soul Entertainment has also promised to reinstate health insurance coverage for its employees, which had lapsed in May.
However, there is uncertainty surrounding the company’s ability to secure the loan, as the bankruptcy filing reveals debts owed to various retailers, Hollywood studios (including Universal, Sony, Lionsgate, and Warner Bros.), smaller studios, streaming platforms, smart TV manufacturers, landlords, and other vendors.
Chicken Soup for the Soul Entertainment accumulated $325 million in debt when acquiring Redbox in 2022. Since then, they have faced numerous lawsuits over unpaid bills, including a recent settlement with NBCUniversal that led to a court order to pay the entire $16.7 million balance. Overall, the company has reported $970 million in debt in the bankruptcy filing.