Redbox owner files for bankruptcy after repeatedly missing payments

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

Chicken Soup for the Soul Entertainment informed employees of the filing Friday evening, writing in an email seen by The edge that she had applied for a debtor-in-possession loan – a way for businesses reorganizing after filing for bankruptcy to obtain additional working capital to meet payroll.

This is an emergency for the company, as employees have been waiting for their salaries since June 21. The company has also promised to restore its employees' health insurance, which had 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. Chicken Soup-owned Redbox and Crackle operate their own free and ad-supported streaming services on various platforms. The company also owes money to its owners, the supplier it leases its car fleet from 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.