Chicken Soup for the Soul Entertainment, which purchased Redbox in 2022, has filed for Chapter 11 bankruptcy protection due to severe financial difficulties. The company’s reported net loss of $636.6 million in 2023 has raised alarms about its financial health.
Recent actions such as suspending medical benefits and failing to meet payroll, leaving employees without pay for a week, have exacerbated concerns. In an effort to alleviate these immediate financial pressures, the company has sought a debtor-in-possession loan, contingent upon court approval.
In a message to employees, Chicken Soup for the Soul Entertainment assured them that, with court approval, payroll would be funded early in the week and future payroll would be secured. Additionally, plans are in place to reinstate medical benefits from May 14, 2024, onwards.
The acquisition of Redbox, valued at $375 million, burdened the company with substantial debt. Reports indicate it owes significant sums to major entities like Walmart, Universal, Sony, and various other creditors, accumulating total debts nearing $970 million.
Beyond Redbox, Chicken Soup for the Soul Entertainment owns additional assets, including the streaming service Crackle and various film and TV brands, alongside its renowned self-help book series.
The bankruptcy filing reflects the company’s efforts to restructure and manage its financial obligations amidst ongoing operational challenges and debt repayments.
