The prolonged and often turbulent unraveling of Redbox’s decline has taken yet another surprising turn, one that underscores how drastically the fortunes of a once-iconic brand have shifted. New developments indicate that assets formerly belonging to Chicken Soup for the Soul Entertainment—the corporate parent of Redbox—may finally be on the cusp of finding a buyer. However, observers hoping for a renaissance of the crimson-red kiosks that once stood outside countless convenience stores, or the revival of Chicken Soup’s Crackle streaming platform, are likely to be disappointed. The latest chapter is not about reviving consumer-facing entertainment services but instead about leveraging complex legal strategies centered on intellectual property rights and copyright enforcement.
According to documents filed late on Wednesday in bankruptcy court, a firm identified as Grove Street Partners has put forward a $100 million offer to acquire what are being described as “IP Litigation Assets” owned by Chicken Soup for the Soul Entertainment and its subsidiaries. Though the public details remain somewhat opaque, the records clarify that these assets chiefly comprise the rights to pursue ongoing or future legal action over alleged copyright infringements. Specifically, the claims revolve around potential violations of the Digital Millennium Copyright Act (DMCA) concerning films and other media titles under the ownership or control of the estate. Chicken Soup for the Soul Entertainment, largely through its subsidiary Screen Media Films, maintained rights to a substantial catalog of movies, numbering in the hundreds. Yet, the exact scope and titles of the contested intellectual property being transferred remain undisclosed, keeping the true scale of value and risk somewhat uncertain.
Grove Street Partners, it turns out, is not an entirely new entrant to this arena. The company is the previous iteration of Grove Street Funding, a firm that specializes in helping intellectual property holders pursue, finance, and coordinate lawsuits tied to copyright infringement. Its strategic focus targets litigation driven by the DMCA, but rather than centering on individual consumers casually distributing pirated movies online, it takes aim at Internet Service Providers (ISPs). The operational logic here is to treat ISPs not merely as neutral conduits but as entities potentially liable for enabling infringement. According to Grove Street’s theory, if an ISP fails to respond adequately to a pattern of illegal downloading activity conducted by its subscribers, then the ISP can—and should—be exposed to costly damages. This positions ISPs as defendants with deep pockets, far more capable of absorbing multi-million-dollar settlements or judgments than individual end users.
Tom Murphy, Grove Street’s chief executive officer, previously outlined this tactic in a presentation prepared several years ago for another company pursuing similar claims. He argued that ISPs are distinctly vulnerable to enormous financial settlements, since the liability generated by widespread illegal BitTorrent file sharing could be directly attributed to their lack of action. Projections in his presentation estimated that individual films illegally distributed might generate damages ranging anywhere between $200,000 and $4 million per property. In theory, multiplied over a significant catalog of titles, this litigation strategy could yield staggering sums for rights holders—or at least justify high-value claims in court.
The recently revealed purchase agreement stipulates that Grove Street will pay the $100 million price tag for these rights over a series of five annual installments rather than a lump sum. Murphy told reporters that the company already has funding partners lined up who specialize in litigation finance—meaning firms willing to shoulder the legal costs in exchange for a share of any eventual settlements or damages. According to him, they also hold digital forensic evidence, DMCA correspondence, and a structured plan intended to bolster the pending cases. He refrained, however, from going into detail about how the company’s long-term financing is structured or what level of risk its backers are assuming.
This broader legal strategy fits within a trend. In recent years, the entertainment and media industries have demonstrated an increasing appetite for litigation directed at ISPs. Copyright holders insist that telecoms and broadband providers are not taking sufficient steps to curb widespread digital piracy among their subscriber bases. One of the most high-profile examples of such litigation was the music industry’s lawsuit against Cox Communications, which initially produced a jaw-dropping $1 billion judgment against the ISP in 2019. That decision, though, was later overturned on appeal, and at present both sides are engaged in ongoing proceedings before the U.S. Supreme Court, with the ultimate outcome still uncertain. This illustrates both the enormous potential scale of damages in these cases and their unpredictable legal trajectory.
Not all such lawsuits, however, yield lucrative results for rights holders. Even Chicken Soup for the Soul Entertainment’s own subsidiaries, including Screen Media Ventures, pursued litigation against multiple ISPs under similar theories of liability. While some of these lawsuits remain bogged down in lengthy court proceedings, at least one was recently abandoned altogether. In 2023, a case brought against Astound Broadband’s subsidiary, Grande Communications, was abruptly withdrawn. Astound’s general counsel, Jeff Kramp, did not miss the opportunity to highlight the outcome publicly, declaring with some triumph that his company had not paid “a cent” to resolve the matter—an example that underscores the uncertain payoff of such aggressive litigation.
Meanwhile, the overarching bankruptcy of Redbox and Chicken Soup for the Soul Entertainment continues to grind forward in a slow, contentious manner. Alongside creditor claims and asset sales, lawsuits are simultaneously being directed at the leadership team that formerly helmed Chicken Soup. Filed by both disgruntled former employees and the bankruptcy trustee, these suits allege serious failures of corporate stewardship, ranging from questionable financial management to broader accusations of mismanagement at the highest levels. The executives named in these suits have consistently denied any wrongdoing, but the confrontation only adds further complexity to a company already surrounded by turmoil.
Ultimately, the present direction of Redbox’s story is not one of technological revival or consumer nostalgia. Instead, it illuminates a striking transformation: from a household name associated with an everyday staple of home entertainment to an embattled entity whose remaining value is measured through the prism of intellectual property claims and litigation strategies. For audiences who once equated Redbox with the convenience of a Friday-night movie rental, this legalistic pivot serves as a sobering reminder of how quickly the entertainment industry—and the fortunes of those within it—can change beyond recognition.
Sourse: https://www.theverge.com/tech/791013/redbox-chicken-soup-piracy-lawsuits-ip-sale-grove-street
