Redbox Declares Bankruptcy

Defaulting on loans, missing paychecks for employees, and an order for company cars to be repossessed has led a prominent name in the movie rental business to seek bankruptcy protection.

You’ve likely encountered one of those iconic red vending machines at your local grocery store or convenience store. These machines, known for offering a variety of movies for rental, appear to be symbols of a bygone era as the company behind them faces significant financial troubles.

The Redbox movie rental company, owned by Chicken Soup for the Soul Entertainment, has filed for bankruptcy protection following months of severe financial issues. As reported by Verge, Chicken Soup for the Soul Entertainment notified its employees last week about the bankruptcy filing. The company aims to secure a “debtor-in-possession loan,” which, if approved, would aid in reorganization and provide the necessary working capital to cover payroll.

The filing revealed that many employees have not received paychecks since June 21st and that all employees lost their health insurance after it expired in May. Chicken Soup also has multiple outstanding debts, including amounts owed to retailers like Walmart and Walgreens and significant Hollywood studios such as Universal, Sony, Lionsgate, and Warner Bros. Additionally, the company is indebted to its landlords and the firm from which it leases its car fleet.

Chicken Soup acquired Redbox in 2022, a move that hasn’t been smooth sailing. Since the acquisition, the company has faced over a dozen lawsuits related to unpaid bills from various entities. Court documents reveal that Chicken Soup currently holds $970 million in debt.

It appears the era of Redbox, once a convenient and popular method for renting movies, might be nearing its end as financial woes continue to mount. The convenience of these red boxes, located strategically near exits of grocery and convenience stores, brought joy to many movie lovers. However, the company’s current situation highlights the challenges and uncertainties in the evolving landscape of movie rentals and entertainment.

Source: Verge