Chicken Soup for the Soul Entertainment has confirmed what has appeared inevitable, at least recently, filing for Chapter 11 bankruptcy protection in Delaware.
“In connection with the filing, we have applied for approval of a debtor in possession [DIP] loan," the owner of the troubled Redbox DVD rental kiosk business told employees Saturday. "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.”
Chicken Soup made an ill-fated purchase of Redbox two years ago, taking on $325 million in debt.
Lately, the company's troubles seemed to accelerate to terminal velocity.
Last week, after missing a $4 million payment to NBCUniversal, a Los Angeles Superior Court judge ordered Chicken Soup to pay the conglomerate the total $16.7 million it owes it.
Earlier this month, chairman and CEO William J. Rouhana fired everyone on the Chicken Soup board, including his wife, after the company failed in its quest to meet the terms of a debt forbearance agreement with creditors.
Per Saturday's filing, Chicken Soup listed total debt o $970 million, with creditors including Sony, Warner Bros. Discovery, Paramount, Lionsgate and Walmart, among others.
Investors, for the most part, have already lost their money, with the stock trading at 14 cents a share.
Liquidation would seem to spell the end of a company that started in the late 1990s as a line of popular self-published self-help books.
