Chicken Soup For The Soul Entertainment, owner of Redbox, removes entire board of directors
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Chicken Soup for the Soul Entertainment, the ailing parent company of video kiosk operator Redbox and streaming services like Crackle and Popcornflix, has gotten rid of its entire board of directors.
The only remaining board member, the company said in a filing with the SEC late Monday, is president and CEO Bill Rouhana. The company’s investor relations website lists eight other board members, including Rouhana’s wife, Amy Newmark. In addition to serving on the entertainment company’s board, Newmark is publisher, editor-in-chief and author of Chicken Soup for the Soul Holdings.
In the filing, the company revealed that the change was made on June 11 in accordance with Delaware General Corporation Law. The law allows that “any director or the entire board may be removed, with or without cause, by the holders of the majority of the shares”, according to the document, which was signed by CFO Jason Meier.
The company declined to comment on the board’s departures when contacted by Deadline.
The holder of more than 75% of the voting power of the company’s common shares took the initiative, the process explained, to dismiss without just cause all members of the board of directors and the boards of each subsidiary. In a typical corporate governance structure, the board of directors serves as an overseer of a company’s management team, overseeing executive compensation and having the ability to scrutinize strategic plans or transactions.
CSSE, which went public in 2017 as a film and TV extension of the highly successful self-help publishing brand, has grown through acquisitions of entities such as Crackle, Screen Media, 1091 Pictures and Sonar Entertainment. Although the document does not identify the shareholder responsible for the board’s departures, Chicken Soup for the Soul Holdings, which controls publishing rights to the namesake franchise as well as ancillary businesses such as a line of pet foods, has accumulated a large stake. at CSSE in recent years. months.
After CSSE closed its biggest M&A deal to date in mid-2022, a $375 million merger with video retailer Redbox, it reeled under the transaction’s debt load along with the impact of the strikes. of 2023 in the Hollywood film pipeline and the ongoing changes in cinema. consumption habit. Its stock has traded below $1 per share for nearly a year, prompting a delisting notice from Nasdaq. Filmmakers and consultants have filed lawsuits over what they say are unfulfilled contracts, and the company has faced the imminent threat of bankruptcy, managing to avoid it by renegotiating the payment of certain debts.
In early spring, the company said it had entered into an agreement that allowed it to raise $175 million in additional working capital from two financing parties. The agreement also included a plan to make a $75 million loan prepayment under the company’s main line of credit.
CSSE shares, which fell 6% during regular trading on Monday to close at less than 29 cents, recovered 3% after hours as news of the board’s action began to circulate.
