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    Redbox’s parent company stopped paying employees for over a week before finally filing for bankruptcy

    Redbox’s parent company has filed for bankruptcy.

    AP

    Redbox’s parent company filed for Chapter 11 bankruptcy protection.The company’s net loss was $636.6 million in 2023.Employees haven’t been paid since June 21.

    Redbox’s parent company hasn’t paid its employees in over a week amid financial woes that ultimately resulted in Chapter 11 bankruptcy.

    Chicken Soup for the Soul Entertainment filed for bankruptcy protection on Friday, and Redbox Entertainment filed the following day, according to online records. Chicken Soup for the Soul Entertainment completed a $370 million deal to acquire Redbox Entertainment in 2022.

    The media company’s $970 million debt has trickled down to its employees, who haven’t received payment since June 21 and worked without health insurance since May, according to The Verge.

    Several employees spoke to Deadline, including one senior executive who said management hadn’t provided a clear schedule for when payroll would start again.

    “We haven’t heard anything over the past couple of days,” the employee said in the article published June 26. “Initially, they said checks would go out Tuesday at the latest. And now here we are.”

    The bankruptcy filing might help.

    A Redbox video rental kiosk from 2009.

    Justin Sullivan/Getty Images

    Employees received a message early Saturday morning announcing that court approval for the bankruptcy protection could jump-start payments. Staff medical benefits could also be reinstated, according to Deadline.

    “In connection with the filing, we have applied for approval of a debtor in possession [DIP] loan,” the message said. “Upon court approval, we expect payroll to be funded early in the week and funding for this upcoming week’s payroll to also be secured. We also expect to have the funds to reinstate medical benefits back to May 14, 2024 and going forward. We will provide regular updates.”

    Representatives for Chicken Soup for the Soul Entertainment did not respond to a request for comment from Business Insider.

    Chicken Soup for the Soul’s financial issues took a turn for the worse in 2023. In addition to the debt assumed from acquiring Redbox, the company also struggled amid the Hollywood writers’ and actors’ strike that year, which caused a decrease in physical disc rentals.

    The company missed payments owed to vendors and filmmakers, prompting some to file lawsuits.

    Chicken Soup for the Soul recently settled with NBC Universal but missed the first payment, according to the Verge. A court order will require the company to pay the entire $16.7 million balance.

    Read the original article on Business Insider

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