(Photo : Unsplash/MelindaGimpel )
Chicken Soup for the Soul Entertainment (CSSE), which owns the DVD rental service Redbox, has filed for Chapter 11 bankruptcy protection. The company decided to address the financial challenges it is currently facing.
Financial Struggles Lead Chicken Soup for the Soul Entertainment to File for Bankruptcy
Chicken Soup for the Soul Entertainment, the parent company of Redbox, has filed for Chapter 11 bankruptcy protection following months of financial difficulties and mounting unpaid bills, As the Associated Press revealed.
According to documents filed on Friday in Delaware bankruptcy court, the company has accrued nearly $1 billion in debt after reporting consecutive quarterly losses.
The filing reveals that Chicken Soup for the Soul owes millions of dollars to over 500 creditors, including major entities in the entertainment industry, such as Sony Pictures and Warner Bros, and prominent retailers like Walgreens and Walmart.
As of March this year, the company's assets were valued at approximately $414 million, while debts amounted to $970 million. Shares of Chicken Soup for the Soul, a publicly traded company, have plummeted by more than 90% in the past year.
When contacted by The Associated Press on Monday, the Connecticut-based company declined to provide a comment. However, court documents indicate that Chicken Soup for the Soul cited a lack of cooperation from its lenders in seeking refinancing as a contributing factor to its decision to file for bankruptcy.
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Struggling Merger and Financial Decline
(Photo : Unsplash/GlennCarstens-Peters)
According to CBS News, since going public in 2017, Chicken Soup for the Soul has experienced rapid growth, attracting investors like Ashton Kutcher. Annual revenues soared from under $10 million to over $294 million by 2023.
In 2022, the company acquired Redbox, known for its DVD rental kiosks outside pharmacies and grocery stores, to expand across different media platforms and increase revenue.
Despite these ambitions, the merged business struggled to profit, and losses continued to mount. By 2023, Chicken Soup for the Soul reported around $110 million in revenues. In March, the company disclosed concerns about its ability to remain operational in a regulatory filing.
The company's stock price, reaching nearly $50 in 2021, plummeted by more than 90% over the past year. The stock was trading at just 11 cents as of Monday's market close.
Diverse Storytelling and Social Impact at Chicken Soup for the Soul
Since 1993, Chicken Soup for the Soul has embraced a socially conscious mission of promoting inclusivity through storytelling, as its website highlighted.
The company, known for its motto, "Changing the world one story at a time," has been dedicated to publishing diverse narratives that celebrate people of various faiths, nationalities, ethnicities, sexual orientations, and gender identities.
Throughout its history, Chicken Soup for the Soul has allocated some of its revenues to support nonprofit organizations that positively impact globally. Recent beneficiaries include American Humane, Toys for Tots, and Dress for Success.
Beyond its iconic books, Chicken Soup for the Soul now engages audiences through diverse entertainment platforms such as TV, movies, podcasts, and pet food products. The company remains committed to sharing inspirational and wellness-focused content while promoting unity and understanding among individuals, valuing the richness of human differences.
With a team that reflects diverse backgrounds, including ethnicities, religions, nationalities, and LGBTQ representation, Chicken Soup for the Soul continues prioritizing diversity in its workforce and storytelling. The company's ongoing mission focuses on advancing its goal of "changing the world one story at a time."
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