Chicken Soup for the Soul Entertainment, the owner of Redbox, filed for bankruptcy protection overnight. Just at the end of the month, the DVD rental company defaulted on its loans, received a repossession order on its cars, and failed to pay its employees.
Chicken Soup for the Soul Entertainment notified employees of the document late Friday, writing in an email edge The company has applied for a debtor-in-possession loan — a way for companies reorganizing after filing for bankruptcy to obtain additional working capital to meet payroll.
This is an urgent matter for the company as employees have been waiting for their paychecks since June 21. The company also pledged to reinstate employees’ health insurance, which lapsed in May.
However, it is uncertain whether the company will be able to obtain such a loan. Chicken Soup’s bankruptcy filing shows the company owes money to several retailers including Walmart and Walgreens, as well as major Hollywood studios including Universal Pictures, Sony, Lionsgate and Warner Bros.
Other creditors include small studios, streaming platforms and smart TV makers, including the BBC, Vizio and Plex; Redbox and Chicken Soup’s Crackle have been operating their own free, ad-supported streaming services on various platforms. The company also owes money to landlords, rental fleet providers 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 the lawsuits with NBCUniversal, but quickly missed the first agreed-upon payment, leading to a court order to pay the entire $16.7 million balance. According to the bankruptcy filing, Chicken Soup has a total debt of $970 million.
