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[AJUMP23]

Redbox is dead, bankrupt and shutting down its kiosk.

Breaking: Redbox is shutting down, corporate parent is being liquidated

Court hearing included allegations of fraud

www.lowpass.cc

Redbox is shutting down, corporate parent is being liquidated​

This is it for Redbox: The judge overseeing the bankruptcy case of Redbox’s corporate parent Chicken Soup for the Soul Entertainment granted the debtors request to convert it from a Chapter 11 bankruptcy to a Chapter 7 bankruptcy, effectively paving the way for shutting down the company and liquidating its assets.
Chicken Soup for the Soul Entertainment’s CEO Bart Schwartz, who had only joined the company two weeks ago, stepped down this morning for unrelated reasons, according to the attorney representing the debtors in the case.
Companies use Chapter 11 bankruptcy cases to reorganize, allowing them to continue to operate while they rid themselves of debt, while a Chapter 7 bankruptcy generally results in a trustee selling off company assets to pay creditors, and winding down the company.
“There is no means to continue to pay employees, pay any bills, otherwise finance this case. It is hopelessly insolvent,” United States bankruptcy judge Thomas Horan determined during a hearing Wednesday, adding: “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. So I am going to grant the motion.”

Attorney Richard Pachulski, who had asked the court for the conversion of the case, said that debtors had believed until yesterday that the company could be saved. “I think there is value here,” he said. However, HPS, the lender holding most of Chicken Soup’s debt, wasn’t willing to take the risk of loaning any more money to the company for its continued operations.
Even additional cash injections likely wouldn’t have saved Redbox, with Pachulski telling the court that the entity’s payroll was higher than its current earnings. “We were going to have to shut down the Redbox entity and terminate the employees,” he said. The plan was to retain only between 100 and 150 out of over 1000 employees, primarily in other parts of the company.
Chicken Soup for the Soul Entertainment had faced a major cash crunch in recent months that left the company unable to pay bills from content partners, store chains hosting Redbox kiosks, and even the company Redbox had leased its car fleet from. The company’s cash citation worsened in June when it failed to make payroll, and wasn’t able to obtain health insurance for its employees anymore.

Chicken Soup was able to pay back some of those owed wages this week after obtaining a so-called debtor-in-possession loan from HPS, but Pachulski told the court that the loan wasn’t even enough to cover everyone’s health insurance. The company had also failed to make payroll taxes for the past 9 months, and didn’t pay for its employee’s health insurance for 2.5 months prior to filing for bankruptcy.
However, it continued to deduct employee health insurance contributions from paychecks, and allegedly kept 401k contributions as well. “If that’s the case, I find it sickening, frankly, that money was taken from the paychecks from these people, and not put it where it belonged,” judge Horan said Wednesday. “It’s incredibly disturbing.”
“The massive mismanagement … this is beyond the pale of anything I have seen,” agreed Pachulski. “I think what has been done here is criminal, to be very frank.”

Anyone ever use Redbox much? I remember the real issues started for them, when studios refused to allow them to have movies in their boxes the same week they went digital or were released.

 

[ResilientBanana]

I don't have a Blu-Ray or DVD player. Seems only right.

 

[Doom85]

I don't have a Blu-Ray or DVD player. Seems only right.

I do, but the appeal of renting discs rapidly lost appeal when my friends and I rented Shutter Island for a fun Saturday night, started the movie, and 30 minutes in it stops playing, we take the disc out and notice significant scratches. Fun Saturday night ruined by some unknown jackass. Because even if they don’t own the disc, some assholes just don’t respect the methods of proper disc handling.

If you‘re interested in a film/show, rent it digitally or stream it. If you like it well enough, then buy the disc yourself.

 

[Sushi_Combo]

I do, but the appeal of renting discs rapidly lost appeal when my friends and I rented Shutter Island for a fun Saturday night, started the movie, and 30 minutes in it stops playing, we take the disc out and notice significant scratches. Fun Saturday night ruined by some unknown jackass. Because even if they don’t own the disc, some assholes just don’t respect the methods of proper disc handling.

If you‘re interested in a film/show, rent it digitally or stream it. If you like it well enough, then buy the disc yourself.

Yep, used to work at a rental store and this became an issue with many DVD's. Usually we'd check everything when they're returned and we'd throw some in the buffing machine. But sometimes those scratches get way too deep.

 

[TransTrender]

Linked from the original article:

Unplugged kiosks, unpaid bills: Inside Redbox’s rapid decline

Redbox is being sued by CVS, Publix, Sheetz and a number of others as the DVD kiosk rental chain stopped paying its bills amid a cash crunch.

www.lowpass.cc

Chicken Soup, who also owns Crackle (that's still a thing), acquired Redbox for $375 Million which assumed $350 Million in debt.
Subsequently wrote down $230 Million in value the next year.

I'm still not sure how Redbox got this bad in the first place.

 

[Doom85]

Somewhat relevant, of all the South Park episodes I’ve seen, the one where Randy becomes an owner of a Blockbuster store long after the company has been done for and the hopeless situation of him getting any business becomes an homage to The Shining (plus the boys go Trick r Treating as The Avengers, also Gangnam Style is played as it was that year) is still my personal favorite:

 

[ClanOfNone]

The only real surprise here is that this didn’t happen sooner.

 

[RiccochetJ]

I thought they were a good service and were usually about half the price to rent compared to renting from Amazon, MS, and Sony. Then things got a lot more competitive and Amazon started giving me digital credits for their movies when I would get things delivered on specific days.

 

[West Texas CEO]

The end on an era ..

 

[Pagusas]

Feel sorry for the employees, and hope the case is converted to a criminal one too and those responsible for taking their health insurance and 401k payments are brought to justice.

 

[Evil Calvin]

Well, they succeeded with their boxes and cheap rentals everywhere and effectively put Blockbuster out of business. Blockbuster DID put out some of their own kiosks but too little too late. Basically they kept raising prices, got fewer new movies, and released their streaming app waaaay too late in the game. They reacted too late, much like Blockbuster did many years earlier. Failed to adapt.

 

[nickp91]

I can't believe the last Blockbuster on Earth has now outlived Redbox

 

[Doom85]

I can't believe the last Blockbuster on Earth has now outlived Redbox

Blockbuster be like:

 

[Mossybrew]

Hah, just the other day I noticed one outside Winco and was like, what the heck Redbox is still around? There was a period of time I used them regularly but that feels like a long time ago.

 

[adamsapple]

Redbox died for me when they stopped doing game rentals.

 

[cash_longfellow]

There’s a Redbox outside of my local Rite Aid, which just got word they are all closing within the year. I should get a sweet side by side sad picture of both together.

 

[cash_longfellow]

Redbox died for me when they stopped doing game rentals.

They died for me when I figured out I had to input my card info into some random ass outside, red box, that I knew nothing about, other than it was named “Redbox”…walking up to it, like “surejan.gif”

 

[adamsapple]

They died for me when I didn’t want to input my card info into some random ass outside red box I knew nothing about other than it was named “Redbox”…walking up to it, like “surejan.gif”

I don't know if they were still doing it, but you could 'book' rentals online on their website and just pick up the game from the kiosk you chose.

 

[HoodWinked]

Last thing I got from Redbox was GTA5 for PS3

 

[Bridges]

Redbox died for me when they stopped doing game rentals.

My copy of BioShock Infinite is a RedBox rental I forgot to return.

Back in the day RedBox was something else. Honestly a really great idea in the moment but I guess everyone stopped giving a shit once streaming really took off. I admittedly hadn't felt compelled to use one in many years but I'm actually pretty bummed about this