Redbox owner Chicken Soup for the Soul files for Chapter 11 bankruptcy protection

In a recent development, Chicken Soup for the Soul Entertainment, the parent company of the popular DVD rental service Redbox, has filed for Chapter 11 bankruptcy protection. This decision follows a period of financial struggles for the company, resulting in a significant accumulation of nearly $1 billion in debt. The bankruptcy filing, submitted in a Delaware court, reveals that the company 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. Despite efforts to boost revenue through acquisitions like Redbox in 2022, Chicken Soup for the Soul continued to face losses, with its shares plummeting by over 90% in the past year. The company's lenders reportedly refused to cooperate with refinancing, leading to the Chapter 11 filing. Redbox, known for its red kiosks offering DVD rentals, was acquired with a reported $325 million debt, aiming to create an entertainment conglomerate by combining physical DVD rentals with streaming services like Crackle. The bankruptcy filing could potentially help Chicken Soup for the Soul address financial challenges, including unpaid employee wages and suspended medical benefits. The company's publishing arm, known for its inspirational book series, remains unaffected by the entertainment unit's bankruptcy. Redbox, with approximately 27,000 kiosks across the US, has become a familiar sight at grocery and drug stores since its launch in 2002, renting over 1 billion discs at competitive prices compared to cable services. As the situation unfolds, stakeholders are awaiting court approval of the company's restructuring plans in Delaware. The impact of the Chapter 11 filing on Redbox's operations and the future of Chicken Soup for the Soul Entertainment remains uncertain, as the company navigates through this challenging financial period.