Judge Converts Chicken Soup for the Soul Entertainment’s Bankruptcy Case

A judge overseeing Chicken Soup for the Soul Entertainment’s bankruptcy case has granted a request to convert it from Chapter 11 to Chapter 7 bankruptcy. This decision will result in the layoff of the company’s remaining 1,000 employees and the liquidation of its businesses, including streaming operations and approximately 24,000 disc kiosks that have been renting out DVDs, Blu-rays, and video games for years (source: Lowpass and The Wall Street Journal).

Judge’s Ruling and Reasons for the Conversion

According to reports, Judge Thomas Horan stated, "There is no means to continue to pay employees, pay any bills, otherwise finance this case. It is hopelessly insolvent… Given the fact that there may also be at least the possibility of misappropriation of funds that were held in trust for employees, there is more than ample reason why this case should be converted."

Chicken Soup for the Soul Entertainment’s Operations

In addition to operating Redbox, Chicken Soup for the Soul Entertainment also manages brands such as Crackle and Screen Media. It is important to note that Chicken Soup for the Soul Entertainment is a part of Chicken Soup for the Soul LLC, and the broader company is not involved in this bankruptcy case, as reported by the WSJ.