Redbox owner files for bankruptcy after repeatedly missing payments

Redbox’s owner, Chicken Soup for the Soul Entertainment, filed for bankruptcy protection overnight. This comes at the end of a month in which the DVD rental company defaulted on loans, saw its cars ordered to be repossessed, and fell behind on paying 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 cover payroll.

It is an urgent matter for the company, as employees have been waiting for their salaries since June 21. The company has 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 secure such a loan. chicken soup The bankruptcy filing 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 small studios, streaming platforms and smart TV manufacturers, with a list of names including the BBC, Vizio and Plex; Redbox and Chicken Soup company Crackle operate free, ad-supported streaming services on a variety of platforms. The company also owes money to landlords, vendors from whom it leases its fleet of cars, 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 it quickly missed the first agreed-upon payment, leading to a court order to pay the full $16.7 million balance. In all, Chicken Soup is $970 million in debt, according to the bankruptcy filing.