Paul J. Taubman’s PJT Partners LP is suing client Redbox Entertainment Inc., which it advised on its 2022 sale, for around $3.4 million in fees the boutique investment bank says remains unpaid.
Redbox, which operates movie rental kiosks frequently located in supermarkets, hired PJT in February 2022 and agreed to pay the firm a 1.5 percent fee on a successful transaction, according to the lawsuit filed in New York state court. A few months later, Chicken Soup for the Soul Entertainment Inc. agreed to buy Redbox in an all-stock deal eventually valued at $398 million.
PJT says its fee from the deal was around $6 million, of which Redbox paid around $2.6 million over several months after the sale closed in August 2022. But the firm says its client hasn’t made a payment since April.
Chicken Soup, of which Redbox is now a subsidiary, didn’t immediately respond to a request for comment.
The alleged unpaid investment banking fee is the latest twist in Redbox’s wild Wall Street journey. Previously owned by Apollo Global Management, the company went public via a blank-check merger in 2021. Then, shortly after the Chicken Soup deal was announced, meme stock traders embraced Redbox, sending its shares on a 1,600 percent rally which came to an end when the acquisition closed.
A media company built around the self-help titles of the same name, Chicken Soup operates the Crackle and Truli streaming services. In announcing the deal, it said it planned to expand Redbox’s installed base of some 38,000 kiosks but also transition the company from physical to digital media.
PJT’s suit comes amid a tough couple of years for M&A advisory shops, with deal volume falling due to higher interest rates and other concerns. On Bloomberg Television in August, Taubman predicted that M&A activity would rebound, if only because the environment “can’t get worse.”
