EXCLUSIVE: Chicken Soup for the Soul Entertainment, which filed for Chapter 11 bankruptcy protection on Saturday, has installed a new CEO and board of directors.
Redbox Owner Chicken Soup For The Soul Entertainment Files For Chapter 11 Bankruptcy Protection
Bart Schwartz, whose business career has not included any significant media or entertainment experience, is stepping in to replace Bill Rouhana as CEO. Schwartz will also be one of three new members of the company’s board of directors.
The news was relayed to employees in an email this morning. The roughly 1,000 workers at the company also are awaiting word from a Delaware bankruptcy court about CSSE’s request for a “debtor in possession” loan, which would allow them to make payroll after a 10-day drought.
Schwartz is a founder and the chairman of Guidepost Solutions, a New York firm providing investigations, monitoring, compliance, security technology and risk management services. For more than 30 years, the former federal prosecutor has managed sensitive and complex matters for government agencies, international corporations and not-for-profits, according to the staff memo. Schwartz was appointed as the receiver of an investment fund that was a feeder to the portfolio managed by convicted fraudster Bernie Madoff. Schwartz managed the fund, over saw affirmative litigation, negotiated with numerous parties and eventually recovered $800 million for victims, distributing $2 billion.
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Along with Schwartz, Steven Goldsmith and Josh Mandel also have been named to the company’s board of directors. In a red-flag event before the bankruptcy filing, Rouhana last month removed the entire board except for himself, citing a seldom-invoked Delaware law enabling a controlling shareholder to do so with or without cause.
Goldsmith’s career includes posts at Amazon, Victoria’s Secret and Brookstone. He also led two media enterprises: ShopNBC and Canada’s The Shopping Channel. Mandel is the former two-term treasurer of Ohio. He oversaw the state’s $22 billion investment portfolio and $232 billion pension custody portfolio after his initial election in 2010 and re-election in 2014.
Chicken Soup for the Soul Entertainment spun off from the self-help book publishing outfit via an initial public offering in 2017. It grew via a series of acquisitions of companies including Screen Media, 1091 Pictures and streaming service Crackle. In mid-2022, the company closed its ill-fated takeover of Redbox , assuming $325 million in debt and inheriting a deteriorating business months before the dual Hollywood strikes of 2023. Those labor actions constricted the studio pipeline and the company soon racked up debts with film distributors and retail locations like Walmart and Walgreens, where it operated thousands of kiosks. Physical rentals have declined markedly in recent years, with once-major players like Target and Netflix completely exiting the sector.
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