The parent company of Redbox, Chicken Soup for the Soul Entertainment Inc., has filed for Chapter 11 bankruptcy in the United States Bankruptcy Court of the District of Delaware. The Connecticut-based company has between 1,000 and 5,000 creditors, with assets totaling $414,075,844 and liabilities at $970,002,065 as of March 31, according to court documents.
Chicken Soup for the Soul Entertainment operates several flagship advertising-supported video-on-demand streaming services, including Redbox, Crackle, and Chicken Soup for the Soul. The company also runs Redbox Free Live TV, a free ad-supported streaming television service with approximately 130 channels, as well as a transactional video-on-demand service. Additionally, the company has a network of approximately 27,000 kiosks across the United States for DVD rentals. The company also creates, acquires and distributes films and TV series through its subsidiaries Screen Media and Chicken Soup for the Soul TV Group.
The news comes after a significant decrease in value of Chicken Soup for the Soul Entertainment’s stock from over $42 in 2021 to just 12 cents at the end of trading on Monday. Despite this setback, Chapter 11 bankruptcy provides businesses and large investors with protection from creditors while they continue operating and develop a repayment plan. In this process both creditors and owners must agree on a reorganization plan which then must be approved by a federal bankruptcy judge.
Chicken Soup for the Soul Entertainment will continue to operate during its Chapter 11 bankruptcy proceedings. It is important to note that this is not an indication of financial failure but rather a strategic move to protect their business interests while they work towards finding solutions to their financial challenges.
