A massive retailer shuts down and now files a surprising bankruptcy in favor of a new Chapter 7 liquidation filing.
The DVD rental company Redbox and 19 similar groups have now obtained a court order to convert its Chapter 11 bankruptcy to a Chapter 7 liquidation on July 10.
Redbox will now begin closing its DVD kiosks around the globe in its new liquidation filing.
Judge Thomas M. Horan of the U.S. Bankruptcy Court for the District of Delaware signed an order to convert Redbox parent Chicken Soup for the Soul Entertainment’s case.
This case requires the debtor to turn over all records and property of the company’s estate to a Chapter 7 trustee in order to facilitate a liquidation and winddown of the debtor.
The debtor listed $500 million to $1 billion in assets and liabilities in its original petition when it had first filed Chapter 11 bankruptcy on June 29.
Redbox operates a network of about 24,000 DVD rental kiosks across the U.S., according to declaration filed in its Chapter 11 case.
Chicken Soup for the Soul Entertainment started out with a huge debt as it assumed about $359.9 million indebtedness under a pre-petition secured facility when it first acquired Redbox in 2022.
It got worse for the company as they reported net losses of $111.2 million in 2022 and $636.6 million in 2023.
It was in a June 2024 Securities and Exchange Commission filing, that the debtor said it might need to file bankruptcy if it didn’t secure additional funding, reports The Street.
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Also Read: Another Mall Clothing Retailer Now At High Risk of Bankruptcy
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A massive rental company with 34k locations now shuts down its operations after filing for bankruptcy and 22 years in business.
Users of movie rental company Redbox were left saddened after it was announced that it would be shutting down operations.
The announcement comes after the rental company’s parent company, Chicken Soup for the Soul Entertainment, filed for Chapter 11 bankruptcy.
According to court documents obtained by the Washington Post, the Connecticut-based company claimed to be one billion dollars in debt.
As a result, Redbox, which was a staple of many grocery stores including Walgreens, and CVS will be shuttered.
Many fans took to social media to express how upset they were with the loss.
“I knew it was coming, sadly,” UltraVada wrote in a post on X, formerly Twitter.
“It was inevitable,” a second person mourned.
“I knew this would happen when I heard they filed for Bankruptcy but its still sad to hear. I have a lot of fun memories of Redbox,” a third person lamented.
“I still don’t think this will be or ever be the end of physical media as we do still get remasters of some movies in 4k/Bluray.”
One person revealed that they had forgotten the rental service had existed.
Some users were not surprised by the announcement.
“Not surprised since nobody really rents videos anymore with the rise of streaming and what not,” one user admitted.
“Also kinda remember getting into a feud with them on here.”
One user also pointed out that the last remaining Blockbuster, located in Bend, Oregon, managed to outlive Redbox.
Redbox was acquired by Chicken Soup for the Soul Entertainment (CSSE) in 2022 and became one of the company’s flagship video-on-demand streaming services.
At its peak, CSSE operated more than 20,000 DVD rental kiosks across the country.
The company’s filing means that the company’s more than 1,000 employees will be laid off, per The Wall Street Journal.
It was also reported by Deadline that many employees at CSSE hadn’t received their paychecks and had medical benefits cut in late June.
Also Read: This Massive Mall Retailer Is Now Closing In California
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