The company reportedly owes almost $1 billion to creditors including Walmart, Vizio, and major movie studios.
Chicken Soup for the Soul Entertainment, the parent company to Redbox , has filed for Chapter 11 bankruptcy protection, they told employees over the weekend. The company's cash flow issues became a full-blown crisis recently, when reports emerged that the company was unable to make payroll, and that they had failed to make insurance payments, thus defaulting on their responsibilities to their employees and leaving workers without healthcare.
"Overnight we filed for Chapter 11 bankruptcy protection," said a message to employees ."In connection with the filing, we have applied for approval of a debtor in possession loan. Upon court approval, we expect payroll to be funded early in the week and funding for this upcoming week's payroll to also be secured. We also expect to have the funds to reinstate medical benefits back to May 14, 2024 and going forward. We will provide regular updates.
Redbox, originally a competitor to traditional video stores and early Netflix, places rental vending machines on the property of popular retailers. The company spun out of a McDonald's initiative to sell a handful of items through vending machines, which started in the early 2000s. By 2003, McDonald's had given up on the idea, and one of their executives thought to use the vending machines for DVDs and video games. In 2005, Redbox was bought up by Coinstar.
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