Redbox parent Chicken Soup for the Soul Entertainment has shifted its bankruptcy filing from Chapter 11 to Chapter 7 , meaning it will liquidate its business. The company, sagging under the weight of nearly $1 billion in debt and a tall stack of unpaid bills, filed for bankruptcy protection on June 29. During bankruptcy court proceedings, it secured a “debtor in possession” loan of $8 million designed to help it resume paying workers after nearly a month of no paychecks and also restore their medical benefits.
Deadline had earlier reported on the delays in pay and health care. Related Stories News Bankrupt Redbox Parent Chicken Soup For The Soul Entertainment Gets Judge's Preliminary OK For Plan Restoring Employee Pay And Benefits Executives Bankrupt Redbox Parent Chicken Soup For The Soul Entertainment Installs New CEO And Board Of Directors On Wednesday, HPS Investment Partners, which has been one of the company’s backers and arranged for financing for the DIP loan, said it could not extend any additional financial resources. It made a motion to shift the Chapter 11 case to Chapter 7, and U.
S. Bankruptcy Judge Thomas M. Horan gave his approval, according to court filings.
The fate of the company’s workforce of 1,000 is unclear. In an email to employees obtained by Deadline, former board members Rob Warshauer and John Young explained that a Chapter 7 bankruptcy trustee would be appointed and then determine the next steps. “The trustee may terminate all employees bu.
