The streaming era has claimed another physical media victim. It is finally time to say goodbye to the once ubiquitous Redbox DVD rental kiosks.
Judge Thomas Horan of the US Bankruptcy Court, District of Delaware, on Wednesday granted a request from Redbox’s parent company, Chicken Soup for the Soul Entertainment (CSSE), to convert its chapter 11 bankruptcy to a liquidation proceeding under chapter 7.
The company’s lawyer, Richard Pachulski, stated during the hearing that Redbox will lay off its workers and liquidate its business assets, which include a streaming service and 24,000 DVD rental kiosks, according to the Wall Street Journal. Pachulski also noted that the company’s creditors are no longer willing to finance the company.
CSSE initially filed for chapter 11 bankruptcy, listing $970 million in debt and $414 million in assets. The creditors included major retailers like Walmart and Walgreens, as well as media companies such as Warner Bros. Home Entertainment, Paramount Pictures, and Lionsgate. CSSE is a subsidiary of Chicken Soup for the Soul, a publishing company not involved in the bankruptcy.
CSSE acquired Redbox for $370 million in August 2020, taking on $359.9 million of Redbox’s debt, with hopes of restoring the struggling company to its pre-pandemic success. At its peak, Redbox operated over 43,000 kiosks across the U.S. and Canada, generating $1.97 billion in revenue in 2013.
In recent court filings, a top lender, HPS Investment Partners, alleged gross mismanagement at Redbox and claimed the company had missed payroll for the past month, resulting in employees losing medical benefits. Judge Horan agreed to appoint a trustee to investigate these allegations, stating there is no means to continue paying employees or bills and highlighting the importance of a chapter 7 trustee to conduct an appropriate investigation.