Company Faces Bankruptcy, Stops Paying Employees and Health Insurance

The downfall of a once-thriving business has left employees in a dire situation as Chicken Soup for the Soul Entertainment, the owner of Redbox DVD kiosks, has stopped paying its workers and let their health insurance lapse. The company, which purchased the failing Redbox business model in 2022, has filed for a debtor-in-possession loan to stay afloat, but the approval is not guaranteed.

Employees have been waiting for paychecks since June 21st, and the company had promised to reinstate health insurance for its workers, which had lapsed in May. With millions of dollars owed to various companies, Chicken Soup for the Soul Entertainment has now switched from Chapter 11 to Chapter 7 bankruptcy. This move will result in the layoff of all 1,000 employees and the closure of all 24,000 Redbox kiosks across the country.

The impact of this decision is already visible, as Redbox kiosks are shutting down, with one location in Kalamazoo, Michigan, already inactive. The closure of these kiosks marks the end of an era for the DVD rental business, which has been overshadowed by the rise of streaming services.

As the company faces financial turmoil, employees are left in uncertainty about their future. The situation serves as a reminder of the challenges faced by businesses in a rapidly changing market and the consequences that can follow when companies fail to adapt.