July 13 (UPI) — Video may have killed the radio star, but streaming has killed the Redbox DVD rental business after company officials announced its closure after 22 years.
Redbox owner Chicken Soup for the Soul Entertainment on Wednesday altered its bankruptcy case from Chapter 11 to Chapter 7 as it prepares to liquidate its Redbox assets and pull 24,000 rental kiosks from locations throughout the nation and Canada.
Redbox officials told employees Thursday they won’t be paid for the wages they’ve earned so far in July but won’t make layoffs official until a bankruptcy trustee is appointed to the parent corporation’s bankruptcy case.
The lack of an official layoff notice makes it uncertain if former Redbox employees can file for and obtain unemployment compensation until a bankruptcy trustee is appointed.
A federal bankruptcy court judge overseeing the case in Delaware affirmed Redbox doesn’t have the ability to pay its employees.
Parent corporation Chicken Soup for the Soul Entertainment also laid off its 1,033 workers in June.
The corporation initially filed for a Chapter 11 reorganization on June 28 with debts totaling $970 million versus assets of $414 million at the end of March.
U.S. Bankruptcy Court Judge Thomas Horan on Wednesday okayed Chicken Soup for the Soul Entertainment’s request to convert the bankruptcy filing to a Chapter 7 bankruptcy liquidation.
The corporation bought Redbox in 2020 despite the DVD rental service peaking in 2013 when it generated $1.97 billion in revenues and had an estimated 43,000 kiosks in locations throughout the United States and Canada.
The Redbox streaming service also is shuttered.
