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The parent company of Redbox DVD kiosks and Chicken Soup for the Soul books has filed for bankruptcy saying it owes more than $1billion.
Chicken Soup for the Soul Entertainment filed for Chapter 11 bankruptcy last week, according to the Wall Street Journal. The company is responsible for the book series by the same name. It also owns Redbox kiosks - which are distinctive DVD rental machines placed outside grocery stores and other businesses.
Crackle, the video-on-demand service, is also owned by the company.
The company said it owes money to more than 500 creditors, including Walmart, Walgreens, Warner Bros. home Entertainment and Sony.
The parent company didn’t comment on the bankruptcy filing, according to the Journal.
Lenders were unwilling to cooperate with potential refinancing leading to the filing, the report noted. Chapter 11 bankruptcy allows a company to reorganize and continue operations despite the filing.
There are more than 34,000 Redbox stations at businesses across the country, according to the Journal.
Chicken Soup for the Soul Entertainment took on $360million in debt when it acquired Redbox in 2022.
The company hoped demand for the kiosk would rebound after the COVID-19 pandemic. However, it failed after the company didn’t have enough money to purchase rights to many films being released, the Journal noted.
Streaming services have also increased in recent years, allowing consumers to access studios and programming right from home instead of visiting a kiosk.
It’s unclear what the future holds for Redbox and the book series due to the bankruptcy.
The Journal reported that chairman William Rouhana said the company will consider selling some of its assets and restructuring current debt loans.
Chicken Soup for the Soul Entertainment saw its stock fall by another 40 percent as of midday Monday, now sitting at 11 cents a share.
The share price has fallen nearly 98.5 percent in the last five years.
It was once valued at 42.49 a share in June 2021.
