informed employees of the filing late Friday […] that it had filed for a debtor-in-possession loan — a way for companies that are reorganizing after filing for bankruptcy to secure additional working capital to meet payroll. […] employees have been waiting for paychecks since June 21st […] it’s not certain that the company will be able to secure such a loan.
Chicken Soup took on $325 million in debt when it acquired Redbox in 2022 and has since been sued over a dozen times over unpaid bills.
Yet another example of leveraged buyouts being bad and dumb. The “risk” may be technically on the company you’re buying’s books but it’s really on the employees who actually face the real consequences of the bet failing.
Without the buyout, the company would have failed even earlier. Doesn’t help the employees either.