Chicken Soup For The Soul Entertainment, the company whose assets include DVD rental kiosk operator Redbox and Screen Media, has shut down after a judge granted permission to switch a Chapter 11 bankruptcy filing to a Chapter 7 liquidation process.
The move comes after Chicken Soup filed for Chapter 11 in late June, by which time sources say unpaid invoices had been piling up. According to the bankruptcy filing the company carried a $970m debt load.
On Wednesday a US judge allowed the company to convert to a Chapter 7 filing. Some 1,000 employees are understood to be losing their jobs without severance payments and 24,000 Redbox kiosks are closing.
The company, whose assets include the streaming platform Crackle, said in court filings it had been unable to secure refinancing from its lenders.
The lenders have refused to cooperate amid allegations of mismanagement by CEO William Rouhana.
Chicken Soup acquired Redbox in 2020 years after the latter’s heyday when it ran more than 40,000 sites in North America and rented DVD’s and games.
According to reports a Chapter 7 bankruptcy trustee will be appointed to determine next steps.
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