cross-posted from: https://hexbear.net/post/9777508

Today, we’re sharing that Character.ai has initiated a voluntary Chapter 11 bankruptcy process to facilitate a court-supervised sale of the company.

Over the past year, we’ve taken meaningful steps to sustain and improve our business amid significant legal, regulatory, and operational headwinds. After a comprehensive review of our available alternatives, our board determined that this court-supervised sale process provides us with the best opportunity to maximize value for all of our stakeholders.

We hope that the sale process will yield an actionable proposal that will allow continued operations of the Character.ai platform. If such a bid is unavailable, however, the platform will be wound down.

As we navigate this process, maintaining a safe and engaging experience for our community remains a top priority.

1. Why did Character.ai file for Chapter 11?

Over the past year, we have taken meaningful steps to sustain and improve our business amid significant legal, regulatory, and operational headwinds.

After a comprehensive review of available options, we determined the best path forward was to begin a Chapter 11 case to pursue a court-supervised sale of all or substantially all of our assets. We believe that this court-supervised process both maximizes the value of our business and provides the best opportunity for continued service to our platform users.