Oct 12 (Reuters) - Character.AI said on Monday it had filed for Chapter 11 bankruptcy in the US and agreed to sell some of its assets to Walt Disney for $20 million.
Here are some details about the bankruptcy and sale proceedings:
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Character.AI said it has begun the formal process to sell assets, including a license of certain intellectual property, through Chapter 11 and is seeking court approval for auction rules that would designate Disney as the lead, or stalking horse, bidder.
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Under this process, Disney's bid would set a baseline offer while allowing competing bidders to submit higher bids, and the company expects the sale process to conclude by late November or early December 2026.
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“After a comprehensive review of the available alternatives, the board determined that this court-supervised sale process provides the company with the best opportunity to maximize value for all stakeholders," said Colin Adams, CEO of Character.AI.
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Character Technologies, the US-based owner of the generative AI platform, listed estimated assets and liabilities between $50 million and $100 million, according to a court filing.
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The company said it intends to continue operating its business, including the Character.AI platform, with minimal service disruptions during the sale process. If the process fails to produce a buyer willing to continue operating the platform, it will be wound down.
Reporting by Rhea Rose Abraham in Bengaluru; Editing by Rashmi Aich
Source: Reuters