New York – Chicken Soup for the Soul Entertainment, the parent company of Redbox, has filed for Chapter 11 bankruptcy protection amid a series of financial struggles and mounting unpaid bills. The company’s filing in Delaware bankruptcy court on Friday revealed nearly $1 billion in debt, following repeated losses in recent quarters.
The Chapter 11 filing also disclosed that Chicken Soup for the Soul owes millions to over 500 creditors, including prominent names in the entertainment industry like Sony Pictures and Warner Bros, as well as major retailers such as Walgreens and Walmart. As of March this year, the company reported assets of about $414 million and debts totaling $970 million, with its public shares plummeting by over 90% in the past year.
Chicken Soup for the Soul declined to comment when contacted by The Associated Press on Monday, citing issues with its lenders’ unwillingness to cooperate on refinancing. The company acquired Redbox in 2022 with hopes of building an entertainment conglomerate to reach consumers through various mediums and increase revenue, but losses persisted. The acquisition also involved taking on Redbox’s reported $325 million debt.
Redbox, established in 2002, is famous for its red-colored, self-service kiosks located outside pharmacies and grocery stores, offering DVD rentals and sales. The filing mentioned that Chicken Soup for the Soul currently operates approximately 27,000 kiosks across the U.S., down from 36,000 at the time of the Redbox acquisition in August 2022. Additionally, the company runs ad-supported streaming services like Redbox Live TV and Crackle, acquired from Sony.
The bankruptcy protection filing by Chicken Soup for the Soul Entertainment reflects the challenges faced by the company amidst a competitive market and changing consumer preferences. As it navigates through this financial turmoil, the future of Redbox and its other entertainment offerings remains uncertain. Investors and industry analysts are closely monitoring the developments to assess the implications of the bankruptcy filing on the company’s operations and future prospects.
