Redbox Is Canceled
Chicken Soup for the Soul Entertainment (CSSE), the parent company that acquired DVD Kiosk-Rental business Redbox for $375 million in 2022, announced that they will officially be liquidating their business.
With nearly $1 billion in debt, the company applied for bankruptcy protection on June 29. Fortunately, they were able to secure a loan of $8 million to pay workers and restore their medical benefits, as they had been working for over a month with no paychecks.
Bankrupt
Originally filing as a Chapter 11 bankruptcy, which allows a company to stay in business and restructure finance operations, the Redbox parent company, Chicken Soup for the Soul Entertainment (CSSE), planned to keep hanging in there. However, this Wednesday, the financial backer HPS Investment Partners, who shelled out that $8 million loan, announced that they could no longer spare any financial resources. It was then that CSSE shifted its bankruptcy status to Chapter 7, meaning everything must go.
Kiosks Are Shutting Down
Execs and employees who were attending the hearing announced that it was a heartbreaking decision and that they had been working day and night to find alternative solutions. However, with the CSSE liquidation set in stone, the current trajectory is that all employees will be let go, and 24,000 Redbox kiosks will be shut down.
As far as providing any back pay or severance for employees, CSSE announced that plans have not been finalized. They did release a statement that a bankruptcy trustee is soon to be appointed to determine next steps. In regards to the Redbox kiosks, no plan has been announced for their removal timeline, but it’s safe to say they will be put out on the curb.
Internal Fighting Spills Out Into Court
With the Redbox case still unfolding, CEO Bill Rouhana has decided to obtain his own separate legal counsel. Neither Rouhana nor his attorney, Morgan Patterson, have released an official personal statement regarding the liquidation to the public or CSSE employees. Richard Pachulski, an attorney representing ousted CSSE board members, expressed his opinion about the CEO in court, saying that Rhouahana should not be allowed to “puppeteer” the company while in bankruptcy,
From Insurance Premiums To Backpay, Employees Are Not Happy
Apparently, a town hall meeting with Redbox employees has been scheduled for this Thursday, July 11. It is there they hope to confront why CSSE has denied health care premium coverage since May when they will be compensated for back pay, and what CSSE will do to further make up for allegedly extorting their employees.
Another Loss For Physical Media
The days of arguing outside of a Safeway with your sibling over what movie to watch that night are over. With the massive popularity of streaming, it was almost inevitable that one day we would be saying farewell to Redbox, but even so, after a beautiful 22 years of friendship and grimy touchscreens, it won’t be easy.
Again, it’s unclear when exactly the Redbox kiosks will be heading for the dump, so you may have time to get one last nostalgic watch in. For those who have forgotten about their return and are wondering if anything can be done about it now, the moral quandary is yours alone.
