Redbox owner and Chicken Soup for the Soul publisher files for bankruptcy.
Chicken Soup for the Soul Entertainment Inc., known for its self-help books, films, and television content, has filed for bankruptcy due to an overwhelming debt load.
The media company filed for Chapter 11 protection in Delaware late Friday, listing assets and liabilities each exceeding $500 million. This filing allows Chicken Soup to continue operations while devising a plan to repay creditors.
According to court documents, Chicken Soup struggled to meet its financial obligations after acquiring DVD rental company Redbox in 2022, incurring about $360 million in debt. Chairman William J. Rouhana Jr. stated in a sworn bankruptcy court statement that this debt would only be manageable if movie releases bounced back from pandemic-era lows.
Despite some recovery in the movie business, additional funds were needed to purchase and distribute new content. However, lenders vetoed a new loan facility, depriving the business of necessary funds, Rouhana explained. This situation left Chicken Soup “unable to pay for all the movies that were offered by their providers, and operating results failed to meet management’s expectations, particularly in Redbox’s kiosk rentals, resulting in insufficient cash flows and working capital to operate the business efficiently,” Rouhana said.
The company plans to use its bankruptcy to sell off some business units and restructure others. It has secured $20 million in new debt to fund the Chapter 11 process.
Chicken Soup still operates approximately 24,000 Redbox DVD rental kiosks across the US and runs Crackle, a no-cost streaming service supported by advertisements. The company’s content library includes 28,000 films and 40,000 television episodes, according to court documents.
Founded in Connecticut in 1993 and named for its feel-good books, Chicken Soup expanded into film and television programming and video streaming, and also launched a line of premium pet food. It became a publicly traded company in 2017.
A representative for the company declined to comment beyond the court filings.
The case is Chicken Soup for the Soul Entertainment Inc., 24-11442, US Bankruptcy Court for the District of Delaware.
