Redbox missed a multimillion-dollar payment it couldn’t afford to miss

Redbox’s fiscal concern continues to spiral retired of its control. On Thursday, a Los Angeles tribunal entered a $16.7 cardinal judgement against the institution successful favour of NBCUniversal, aft Redbox failed to wage a scheduled installment of a colony the parties reached earlier successful May.

The missed outgo bodes sick for the DVD kiosk company, which present owes the remaining equilibrium successful full. More importantly, the missed outgo suggests the institution simply did not person the requisite wealth connected hand, and the imaginable of bankruptcy whitethorn beryllium looming for Redbox and its profoundly indebted firm parent, Chicken Soup for the Soul Entertainment. 

NBCUniversal sued Redbox implicit unpaid DVD and online rental royalties successful February. The workplace alleged in its complaint that Redbox had stopped paying royalties “around the summertime of 2022” and that it was owed astir $16.7 cardinal altogether.

After initially opposing the demand, Redbox settled the suit with Universal successful May, agreeing to wage the full $16.7 cardinal implicit 3 installments. An archetypal $4 cardinal outgo was expected to beryllium wired to Universal by June 10th but ne'er arrived. As portion of the presumption of the settlement, Redbox agreed that if it should neglect to marque good, a tribunal could participate a judgement against it for the afloat magnitude minus immoderate payments made. After the missed payment, Universal asked the court to enforce the colony and participate a judgement against Redbox and Chicken Soup — a petition that was granted Thursday greeting by Los Angeles Superior Court Judge Holly J. Fujie.

Chicken Soup for the Soul Entertainment took connected $325 cardinal successful indebtedness erstwhile it acquired the DVD kiosk institution successful August of 2022, and its fiscal concern has lone gone downhill from there. The institution ended Q1 with an accumulated shortage of $937 cardinal and is being sued by a increasing number of concern partners implicit unpaid bills.

Chicken Soup had planned to rise $175 cardinal this outpouring to wage NBCUniversal, settee different lawsuits, and work indebtedness held by its largest creditor but was incapable to bash so. As a result, the institution defaulted connected its debt successful aboriginal June but didn’t instantly question bankruptcy protection. Instead, its CEO, Bill Rouhana, proceeded to fire the company’s full committee of directors, including his ain wife.

All of this is happening arsenic Redbox is facing different imminent crisis: the institution that is leasing much than 400 cars to Redbox sued implicit unpaid bills arsenic good and won the right to repossess these cars successful aboriginal June. Redbox informed its unit this week that it would statesman to crook implicit a subset of these cars to the fleet institution — a measurement that institution representatives person painted arsenic “evolv[ing] our fleet strategy” successful messages to unit reviewed by The Verge.

In an earlier tribunal filing, Redbox’s attorneys were a batch little cavalier astir the consequences of losing entree to its leased cars, writing, “Redbox would beryllium compelled to terminate hundreds of jobs and would beryllium enactment retired of business.”

Chicken Soup for the Soul Entertainment did not respond to a petition for comment.