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COMPANY · ENTITY #17375

Chapter 11 bankruptcy

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EVENT TIMELINE

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COMPANIES · 1 SOURCE · WIRED AI

Disney hired most of Character.AI staff and seeks license to its tech via Chapter 11

Court filings show Disney paid Character.AI $5.5M (plus a $2M refundable deposit) in September, hired the majority of its employees including CEO Karandeep Anand, and is using Character.AI’s Chapter 11 proceedings to pursue a perpetual, worldwide, nonexclusive license to large parts of the startup’s codebase and safety tools; Disney would pay an additional $12.5M if it wins the auction. The arrangement — described in filings as two integrated transactions and characterized by experts as a form of “reverse acquihire” — appears designed to transfer talent and technology while leaving legal liabilities with the remnant Character.AI entity, raising regulatory and litigation concerns.

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REGULATION · 1 SOURCE · The Verge AI

40 state attorneys general file notice in Character.AI bankruptcy seeking data protections

New York AG Letitia James and 39 other bipartisan state attorneys general filed a notice of interest in Character.AI’s Chapter 11 case, urging the court to require safeguards for sensitive user chats as the company pursues a reported asset sale to Disney. The filing says several states had been investigating consumer-protection and privacy concerns — including risks to minors and an alleged suicide-linked chat — when Character.AI filed for bankruptcy.

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STARTUPS · 3 SOURCES · The Verge AI · TechCrunch AI · The Decoder

Character.AI files for Chapter 11; Disney to buy assets for $20M

Character.AI has filed for Chapter 11 bankruptcy in the US, listing estimated liabilities of $50–100 million, and is seeking to sell its assets. Disney is the lead bidder under a proposed deal that would pay $20 million for certain assets, hire some former Character.AI staff including ex‑CEO Karandeep Anand, and receive a nonexclusive IP license; the company says it will continue operating while the sale process proceeds and may be wound down if no suitable bid emerges.

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