- Redbox’s parent company has filed for Chapter 11 bankruptcy protection.
- The company’s net loss for 2023 was $636.6 million.
- Employees have not been paid since June 21st.
Redbox’s parent company hasn’t paid employees for more than a week amid financial difficulties that ultimately led to its Chapter 11 bankruptcy.
Chicken Soup for the Soul Entertainment filed for bankruptcy on Friday, and Redbox Entertainment filed the next day, according to online records. Chicken Soup for the Soul Entertainment has signed a $370 million deal to acquire Redbox Entertainment in 2022.
The media company’s $970 million in debt has spilled over into its employees, who haven’t received a paycheck since June 21 and have been working without health insurance since May, according to The Verge.
Among the employees who spoke to Deadline, one senior executive said management had not given a clear timeline for when payroll would resume.
“We haven’t heard anything in days,” the employee said in a post on June 26. “We were initially told the checks would be sent out no later than Tuesday, and now this is happening.”
Filing for bankruptcy might help.
Employees received a message early Saturday morning saying that payments may resume following court approval of bankruptcy protection. Employee health benefits may also be resumed, according to Deadline.
“In connection with the application, we have applied for approval of debtor possession. [DIP] The message read, “Pursuant to court approval, we expect payroll funding will be available early this week and this week’s payroll funding will be secured. We also expect funding will be secured to reinstate health benefits retroactively after May 14, 2024. We will provide regular updates.”
A representative for Chicken Soup for the Soul Entertainment did not respond to Business Insider’s request for comment.
Chicken Soup for the Soul’s financial problems worsened in 2023. In addition to debt from its Redbox acquisition, the company struggled that year with the Hollywood writers and actors strike. Fewer physical disc rentals.
The company failed to pay vendors and filmmakers, some of whom filed lawsuits.
According to the Verge, “Chicken Soup for the Soul” recently settled with NBCUniversal but missed the first payment, and a court order now requires the company to pay the full remaining balance of $16.7 million.
