CVS asks court to let it throw out its Redbox kiosks

Thousands of Redbox kiosks could be heading to the dump soon: CVS asked the judge in charge of the bankruptcy case of Redbox’s corporate owner this week to let it throw out its remaining DVD kiosks.

“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,” the company wrote in a legal filing this week. “At other locations, CVS has remodeling plans that have been thwarted by the presence of these large unwanted machines.”

The drug store chain used to be one of Redbox’s major retail partners, hosting over 2500 kiosks in and in front of its stores. However, Redbox’s owner Chicken Soup for the Soul Entertainment stopped paying CVS commissions for movie rentals from those kiosks in 2022, according to a lawsuit filed by the chain earlier this year.

CVS responded by canceling its contract with Redbox, at which point the kiosk vendor was supposed to pick up those kiosks – but it never did. “Redbox refused to remove the kiosks for over six months prior to filing its bankruptcy petition [...] on June 29, 2024,” CVS wrote in its legal filing this week. “Throughout that time, it has generally behaved as though the kiosks were abandoned, although it did remove a very small number of them once it was threatened with a preliminary injunction in a state court lawsuit.”

The odds of Redbox picking up its remaining kiosks went from slim to nil when it filed for bankruptcy last month, with Redbox and its corporate parent now being slated for liquidation by a court-appointed trustee.

“Redbox is in bankruptcy, and its case immediately converted to chapter 7. As such, there is no more Redbox ‘business’ to operate,” CVS concluded. “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.”

CVS isn’t the only one left hanging by the implosion of Redbox and its corporate parent. Tomorrow, ARI, the fleet vendor that had leased over 400 vehicles to Redbox, is scheduled to talk to the bankruptcy court about ways to get those cars back.

And then, there’s of course the matter of Redbox’s and Chicken Soup’s employees, who have been without health insurance coverage since May and stopped getting paychecks in mid-June. As of Wednesday of this week, those employees still hadn’t been officially laid off, complicating their attempts to apply for benefits.

This article was first published as part of Lowpass, a weekly newsletter about AR, VR, streaming and more. Sign up now for free.

Photo CC-BY Mike Mozart.