Character.AI files for Chapter 11 as Disney makes opening bid for assets

Character.AI has filed for Chapter 11 bankruptcy and listed liabilities between $50 million and $100 million. Disney is acting as the lead opening bidder with a $20 million offer for certain assets, and the sale could close by early December. The chatbot platform has faced lawsuits and lost key staff to Google, while its services may continue or shut down if no buyer emerges.

Character.AI sought Chapter 11 protection to sell itself, reporting debts between $50 million and $100 million. Disney is the initial "stalking horse" bidder, offering $20 million for selected assets plus transition help from staff it previously hired from the startup. A higher bid could still emerge, and the deal may close by early December.

Launched in 2022, the platform let people design chatbots with names, voices, descriptions, and greetings, then share them or place them in scenarios. It faced a Pennsylvania lawsuit over medical impersonation, a Texas inquiry into mental-health claims, a Disney cease-and-desist over cartoon characters, and a teen chatbot ban. Google paid $2 billion to hire cofounders and other talent; Disney later named former CEO Karandeep Anand its CTO.

Count? First para: Character.AI(1) sought2 Chapter3 11? "Chapter 11" maybe two words? Let's count words. Character.AI (1) sought2 Chapter3 11(4) protection5 to6 sell7 itself8, reporting9 debts10 between11 $50(12) million13 and14 $100(15) million16. Disney17 is18 the19 initial20 "stalking21 horse"22 bidder23, offering24 $20(25) million26 for27 selected28 assets29 plus30 transition31 help32 from33 staff34 it35 previously36 hired37 from38 the39 startup40. A41 higher42 bid43 could44 still45 emerge46, and47 the48 deal49 may50 close51 by52 early53 December54. First 54.

Second: Launched1 in2 2022,3 the4 platform5 let6 people7 design8 chatbots9 with10 names11, voices12, descriptions13, and14 greetings15, th