(RTTNews) – Chicken Soup for the Soul Entertainment (CSSE), the parent company of movie rental company Redbox, has filed for Chapter 11 protection in Delaware due to approximately $970 million in debt.
The company also owes billions of dollars to other media companies such as Universal Studios, Sony Pictures (SONY), and BBC Studios Americas, as well as several retailers including Walgreens (WBA) and Walmart (WMT).
The media company took on more than $300 million in debt following its acquisition of Redbox from Apollo Global Management (APO) in 2022, according to the filing.
Later, according to CNN, the company struggled to combine the DVD rental business with its free streaming service Crackle, due to Hollywood strikes limiting the production of new content and people's low interest in renting physical DVDs.
According to Fortune, the Connecticut-based company began looking for additional funding, but the company's lenders balked at the new credit facility, leaving Chicken Soup “unable to pay for all of the movies it offered through its providers, and operating results failed to meet management's expectations, particularly Redbox's kiosk rentals, resulting in insufficient cash flow and working capital to operate the business efficiently.”
Notably, the company's publishing arm will not be affected by the bankruptcy filing.
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