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Redbox’s owner files for bankruptcy after repeatedly missing payments and payroll (www.theverge.com)

submitted 5 months ago by Bishma@discuss.tchncs.de to c/technology@lemmy.world

24 comments fedilink hide all child comments

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.

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[–] pdxfed@lemmy.world 13 points 5 months ago (1 children)

One of the few good legal standards around bankruptcy is that unpaid wages to workers are actually, surprisingly paid out of assets prior to investors getting their cut.

[–] partial_accumen@lemmy.world 4 points 5 months ago (1 children)

I'll agree that's a good thing, but that depends on there being assets (likely in this case), but it also means workers may have to wait months or years before the bankruptcy proceedings are complete. That shouldn't be a burden lower wage workers have to shoulder.

[–] pdxfed@lemmy.world 3 points 5 months ago

No and in a classic capitalist paradise, in the US state DOLs/BOLIs have emergency funds out of which they pay workers wages. For the capitalists who couldn't. Privatize the gains, socialize the losses. Learned about that when a regional Thai restaurant chain went under, declared bankruptcy and then the state paid their workers. So messed up. Such a great reason to get corporate shielding so your "personal" gains aren't subject to clawback.

Corporate law has to change, but unlikely as things are.