Redbox owner Chicken Soup for the Soul Entertainment filed for bankruptcy Wednesday night. This comes at the end of a month in which the DVD rental company defaulted on its loans, had its cars repossessed and failed to pay its employees' wages.
Chicken Soup for the Soul Entertainment informed employees about the filing on Friday night, writing in an email seen by The edge that had applied for a debtor-in-possession loan, a way for companies that are reorganizing after filing for bankruptcy to obtain additional working capital to cover payroll.
This is an urgent matter for the company, as employees have been waiting to receive their salaries since June 21. The company also promised to restore health insurance for its employees, which had expired in May.
However, it is not certain that the company will be able to obtain such a loan. Chicken Soup's Bankruptcy declaration shows that the company owes money to several 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, with the list of names including BBC, Vizio and Plex; Crackle, which is owned by Redbox and Chicken Soup, has been operating its own free, ad-supported streaming services on a variety of platforms. The company also owes money to its landlords, the vendor it rents its car fleet 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 invoices. The company recently settled one of those lawsuits with NBCUniversal but quickly failed to make the first agreed-upon payment, leading to a court order to pay the entire $16.7 million balance. In total, Chicken Soup is $970 million in debt, according to the bankruptcy filing.
