Chicken Soup for the Soul Entertainment has filed for Chapter 11 bankruptcy protection as it grapples with almost $1 billion in debt.
The media company, best known for owning the Redbox movie rental kiosk brand, informed its employees of its filing on Saturday, which was done with a Delaware bankruptcy court. The filing states that the company owes $970 million, and lists multiple unsecured creditors, including Walmart, Sony Pictures, Universal Studios, and Paramount Pictures, among others.
“Overnight we filed for Chapter 11 bankruptcy protection,” a message to employees read. “In connection with the filing, we have applied for approval of a debtor in possession [DIP] loan. Upon court approval, we expect payroll to be funded early in the week and funding for this upcoming week’s payroll to also be secured. We also expect to have the funds to reinstate medical benefits back to May 14, 2024 and going forward. We will provide regular updates.”
(Joe Kohen/AP Images for Redbox)
Earlier this month, an SEC filing from the company stated that its net losses last year was $636.6 million, up drastically from 2022’s $111.2 million. The filing stated that unless funding for the company was secured, bankruptcy could be considered a possibility.
Besides Redbox, Chicken Soup for the Soul Entertainment is also known as the parent company of Crackle and Popcornflix, both of which are ad-supported free streaming services.
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Chicken Soup for the Soul Entertainment’s financial woes come after the company has made several acquisitions, including Redbox Entertainment in 2022 for $375 million. The iconic red kiosks were well-known for their locations inside stores like Walmart and Walgreens, and provided a means for people to rent physical DVD movies after movie rental Blockbuster went underwater in the early 2010s.
Chicken Soup for the Soul Entertainment is the latest media group to struggle financially, as Vice Media filed for bankruptcy in May last year before being acquired by Fortress Investment Group shortly after. Cineworld, the owner of the Regal Cinemas outlet, similarly filed for Chapter 11 bankruptcy before emerging from bankruptcy last year.