Redbox Owner Chicken Soup for the Soul Files for Chapter 11

Chicken Soup for the Soul Entertainment, the parent company of Redbox, has filed for Chapter 11 bankruptcy protection after facing financial struggles. The company announced the filing in a message to employees, mentioning plans to secure funding for payroll and medical benefits. The company's troubles stem from a debt-heavy deal with Redbox in 2022 and challenges in the physical disc rental market. Despite previous success in streaming services, the company's stock plummeted, leading to the bankruptcy filing. With a total debt of $970 million, the company will navigate the Chapter 11 process in a Delaware court, prioritizing payments to secured creditors like banks. Unsecured creditors, including major studios like Universal and Warner Bros., are listed in the bankruptcy filing. Shareholders are likely to face losses, as the company's stock value has sharply declined. The bankruptcy filing reflects broader challenges in the media industry, with other companies like Vice Media and Cineworld resorting to similar measures in recent years.