Redbox's parent company Chicken Soup for the Soul Entertainment filed for bankruptcy.
Looks like physical media rental wasn't a great investment.
The parent company of Redbox, the video rental kiosk often parked inside or outside grocery stores, filed for bankruptcy on June 28. This comes after the company, Chicken Soup for the Soul Entertainment, failed to pay employees, suspended medical benefits, defaulted on loans, and had an order for its vehicles to be repossessed. According to the filing, it has a total of $970 million in debt.
If approved, Chicken Soup for the Soul Entertainment will receive the capital necessary to pay its employees and reinstate medical benefits. Employees haven't been paid since June 21 and medical benefits halted over a month ago on May 14. Employees took to Reddit to complain about the lack of communication around payment prior to the bankruptcy filing. The company informed its employees of the filing, ensuring that it applied for approval of a debtor in possession loan, reports The Verge.
Additionally, the company owes money to a roster of vendors and studios including big names like Walmart, Walgreens, Universal, Sony, Lionsgate and Warner Bros.
Chicken Soup for the Soul Entertainment acquired Redbox in 2022 putting it in $325 million in debt. It also owns the streaming service Crackle, as well as Screen Media,1091 Pictures, and Sonar Entertainment.
The company has since fallen into financial struggle. It's been sued more than a dozen times for not meeting payments. Last week it failed to meet a payment to NBCUniversal that was a result of one of those lawsuits. In February NBCUniversal sued the company and the lawsuit was settled with the agreement that Chicken Soup for the Soul Entertainment would pay NBCUniversal $16.7 million in three installments. But after it missed the first payment in May the court ordered it to pay the entire balance.
