July 18, 2024

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Redbox Owner Files for Bankruptcy After Repeatedly Missing Payments

Redbox Owner Files for Bankruptcy After Repeatedly Missing Payments

Chicken Soup for the Soul Entertainment, the owner of Redbox, filed for bankruptcy overnight. This comes at the end of a month in which the DVD rental company defaulted on loans, had its vehicles seized and failed to pay its employees.

Chicken Soup for the Soul Entertainment notified employees of the filing late Friday, it wrote in an email seen by the edge She applied for a debtor-in-possession loan — a way for businesses reorganizing after filing for bankruptcy to secure additional working capital to meet employee payrolls.

It is an urgent issue for the company, as employees have been waiting for their salaries since June 21. The company also promised to restore its employees’ health insurance, which had expired in May.

However, it is not certain that the company will be able to secure such a loan. Bankruptcy file appears The company owes money to a number of retailers including Walmart and Walgreens, as well as major Hollywood studios such as Universal, Sony, Lionsgate and Warner Bros.

Other creditors include smaller studios, streaming platforms and smart TV makers, including the BBC, Vizio and Plex; Redbox and Chicken Soup-owned Crackle ran free, ad-supported streaming services on a variety of platforms; and the company owes money to landlords, the vendor it rents its fleet of cars from, and others.

Chicken Soup took on $325 million in debt when it acquired Redbox in 2022, and has since been sued more than a dozen times over unpaid bills. The company recently settled one of those lawsuits with NBCUniversal but promptly failed to make the first agreed-upon payment, leading to a court order to pay the full $16.7 million balance. According to the bankruptcy filing, Chicken Soup is $970 million in debt.

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