The end of an era in video rentals is coming to a close, as Redbox’s parent company, Chicken Soup for the Soul Entertainment, files for Chapter 7 bankruptcy. The move will displace a workforce of about 1,000 workers, as well as around 24,000 kiosks being shut down.
According to reports, Redbox currently has a debt of nearly $1 billion, leading to it filing for bankruptcy on June 29, 2024. During court proceedings, it secured a “debtor in possession” loan of $8 million in order to pay workers who had gone unpaid for a month, and to restore employee’s medical benefits. Now, however, HPS Investment Partners, one of the company’s backers, said it could no longer extend anymore financial help to the failing company.
Redbox’s parent company originally intended to file for Chapter 11 bankruptcy and stay afloat, but not anymore. In an email to employees, former board members Rob Warshauer and John Young remarked that a Chapter 7 bankruptcy trustee would be appointed to help determine the next steps. The two wrote, “The trustee may terminate all employees but that will be a decision that is up to the trustee.”
“We know that many of you have worked very hard (as we have along with the professionals) to provide a path forward that would allow for some continued operations, but as the court was informed, we cannot, in good conscience, continue down this path with no source of funding,” Warshauer and Young wrote in the email.
As most have transitioned to streaming movies from home, the shuttering of Redbox is not surprising. That is little consolation to those who will be without a job, however.