Redbox owner files for bankruptcy after repeatedly missing payments

Redbox owner Chicken Soup for the Soul Entertainment has filed for bankruptcy protection overnight. It comes at the end of a month in which the DVD rental company defaulted on loans, had its cars repossessed and missed employee paychecks.

Chicken Soup for the Soul Entertainment informed employees of the matter Friday evening, writing in an email seen by The edge that it had filed for a debtor-in-possession loan — a way for businesses reorganizing after filing for bankruptcy to get extra working capital to meet payroll.

This is an emergency for the company, since employees have been waiting for their salaries since June 21. The company also promised to reinstate its employees’ health insurance, which lapsed in May.

However, it is not certain that the company will be able to obtain such a loan. Chicken Soup’s bankruptcy filing shows the company owes money to a number of retailers, including Walmart and Walgreens, as well as major Hollywood studios like Universal, Sony, Lionsgate and Warner Bros.

Other creditors include smaller studios, streaming platforms and smart TV makers, including the BBC, Vizio and Plex. Redbox and Crackle, owned by Chicken Soup, operate their own free, ad-supported streaming services on various platforms. The company also owes money to its landlords, the provider from which it leases its fleet of cars and others.

Chicken Soup racked up $325 million in debt when it acquired Redbox in 2022 and has since been sued more than a dozen times over unpaid bills. The company recently settled one of those lawsuits with NBCUniversal, but quickly missed the first agreed-upon payment, leading to a court order requiring it to pay the entire $16.7 million balance. In total, Chicken Soup is $970 million in debt, according to the bankruptcy filing.