One of America’s largest pharmaceutical retailers has petitioned a federal court to allow it to trash hundreds of Redbox DVD rental kiosks that are on its property
In a court filing this week, CVS Pharmacy asked a federal judge overseeing the bankruptcy case of Redbox’s parent company, Chicken Soup for the Soul (CSSE), for permission to remove more than 2,500 DVD rental kiosks that are inside or in front of its stores.
CVS rented or subleased space within its stores for the kiosks, which charged customers around $1 per day to rent blockbuster film titles. The company’s contract with CSSE expired in 2023, though CVS complains that the company has been slow to remove the kiosks over much of the past year.
“Redbox’s failure to remove the Kiosks has caused and continues to cause CVS substantial and unjustifiable economic harm, as well as damages for loss of use and enjoyment of its premises that are not readily financially compensable,” CVS said in a court filing, first reported by Janko Roettgers in his Lowpass newsletter on Thursday. “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.”
CVS complained that the kiosks — which it described as “unwanted machines” — have hindered plans at some of its stores to carry out extensive remodeling efforts, and said CSSE’s failure to remove them in an adequate amount of time after its contract expired amounts to abandonment of property.
“Now Redbox is in bankruptcy, and its case immediately converted to chapter 7,” CVS notes in its filing. “As such, there is no more Redbox “business” to operate. Barring collection of the Kiosks by the Redbox Trustee within seven days of the entry of an order approving this Motion, CVS should be permitted to remove and dispose of the kiosks to avoid incurring additional, substantial damages.”
CSSE acquired Redbox in May 2022 for around $375 million. The move was meant to support CSSE’s expansion plans from its streaming and book publishing business into other forms of media, including out-of-home advertising.
Last month, CSSE filed for Chapter 11 reorganization after accruing nearly $1 billion in debt. Some of its creditors include Comcast’s NBC Universal, Sony Pictures, Walgreens, Vizio, Paramount Global, Warner Bros Discovery, Walmart and BBC Studios.
The bankruptcy case was converted to Chapter 7 after a federal judge determined CSSE had no way to pay its employees and creditors. The change involved the immediate liquidation of CSSE’s assets, including its Redbox business.
