Hen Soup for the Soul Leisure Inc. — the vendor of self-help books, movie and tv content material — filed for chapter after failing to outrun a heavy debt load.
The media firm filed for Chapter 11 safety in Delaware late Friday, itemizing belongings and liabilities of at the least $500 million every. The submitting permits Hen Soup to maintain working whereas it really works on a plan to repay collectors.
Hen Soup struggled to maintain up with its monetary obligations after shopping for DVD rental firm Redbox in 2022, court docket papers present. It took on about $360 million of debt in reference to the deal, a sum that may solely be manageable if it might capitalize on film releases bouncing again from pandemic-era lows, Chairman William J. Rouhana Jr. mentioned in a sworn chapter court docket assertion.
Though the film enterprise rebounded considerably, it wanted extra money to purchase and distribute new content material, Rouhana mentioned. However the firm’s lenders vetoed a brand new mortgage facility, ravenous the enterprise of funds, in line with Rouhana.
That left Hen Soup “unable to pay for all the movies that were offered by their providers, and operating results failed to meet management’s expectations, particularly in Redbox’s kiosk rentals, resulting in insufficient cash flows and working capital to operate the business efficiently,” Rouhana mentioned.
The corporate plans to make use of its chapter to dump some enterprise models and restructure others, in line with court docket papers. It lined up $20 million of recent debt to fund the Chapter 11 course of.
Hen Soup nonetheless operates about 24,000 Redbox DVD rental kiosks throughout the US. It additionally runs Crackle, a no-cost streaming service that depends on ads to make cash. The corporate’s content material library spans 28,000 movies and 40,000 episodes of tv, in accordance court docket papers.
The Connecticut-based firm was based in 1993 and named for its feel-good books. Its growth into movie and tv programming and video streaming got here later, together with a line of premium pet meals. It turned a publicly traded firm in 2017.
A consultant for the corporate declined to remark past the court docket filings.
The case is Hen Soup for the Soul Leisure Inc., 24-11442, US Chapter Courtroom for the District of Delaware.
