Chicken Soup for the Soul Entertainment, the parent company behind Crackle, Redbox, and the streaming service of the same name filed for bankruptcy last month. Earlier this month, Redbox stopped working and locked customers out of their movies, and the shutdown of DVD rentals and its streaming service soon followed.
Now the company faces another challenge with what to do with their iconic red kiosks. With 28,000 kiosks across the country, thousands of those can be found at CVS and the retailer has asked the judge handling the bankruptcy case to let it throw out the remaining DVD kiosks, according to a report by the Lowpass newsletter:
“CVS has locations at which its leases have expired or are about to expire, and the presence of the kiosks at these locations has exposed CVS to potential liability to its landlords,” the company wrote in a legal filing this week. “At other locations, CVS has remodeling plans that have been thwarted by the presence of these large unwanted machines.”
Chicken Soup for the Soul stopped paying CVS commission for movie rentals from over 2,500 Redbox kiosks hosted in front of the drugstore chain in 2022, which was reported by Lowpass. This led to CVS canceling their contract and the Redbox kiosks were supposed to be removed from the stores’ property but never were. According to the report, Redbox did “remove a small number” after being threatened with a preliminary injunction in a state court.
The chances of the company removing the kiosks from CVS and other retailers aren’t likely because the company’s assets are being liquidated during their bankruptcy. With Redbox facing Chapter 7 bankruptcy, CVS argues that there isn’t a Redbox business to operate, which could allow it to throw out the kiosks. Before the company shut down, Chicken Soup for the Soul Entertainment received an $8 million loan that could help the company pay employees who haven’t reportedly been paid in months.