Redbox Owner Chicken Soup For The Soul Entertainment Files For Chapter 11
Chicken Soup For the Soul Entertainment might need an inspiring story and some of that self-help motivation right about now as the publisher’s woes and debt have caught up to them.
Chicken Soup, or CSSE, owner of DVD rental service Redbox, has filed for a Chapter 11 bankruptcy that’s objectively been in the making over the last couple of years – ever since they acquired the struggling home video brand.
According to The Verge, Redbox had been missing payroll for the past month on top of defaulting on loans and receiving an order for their company cars to be repossessed.
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CSSE “informed employees of the filing late Friday” in an email that also noted they had filed for a “debtor-in-possession loan” to supply capital to fund the missed payroll.
Unfortunately, they might not procure this loan due to all the money they owe retailers and creditors. CSSE is on the hook with Walmart, Walgreens, and Hollywood studios including Universal, Sony, Lionsgate, and Warner Bros.
The list goes on to include companies and platforms such as BBC, Plex, and Vizio that the Chicken Soup-owned and ad-based streamer Crackle is entangled with. They also owe millions to landlords, vendors, and NBCUniversal.
They settled a lawsuit with NBCU but were unable to make the first payment agreed upon in litigation. A court then compelled CSSE to pay the full amount of $16.7 million owed in that case.
RELATED: Filmmakers Take Self-Help Publisher Chicken Soup For The Soul Entertainment To Court Over Back Pay
When they bought Redbox, CSSE took on $325M in debt which ballooned their overall debt to nearly $1 billion. The company is still embroiled in lawsuits with jilted clients and partners for several million.
The most recent suit we covered was filed by Keith Knee, an “advisory and consulting services professional” who helped orchestrate the merger with Redbox, in New York.
Knee seeks compensation he was promised consistently for his services, according to his filing, for the past four years. He also alleges that CSSE managed to buy Redbox at a value lower than what they initially thought it was worth.
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