GoKawiilCharacter.AI files for Chapter 11, Disney offers $20M stalking-horse bid for assets
Character.AI has filed for Chapter 11 bankruptcy in Delaware and plans to sell most of its assets, with Disney named as a 'stalking-horse bidder' offering $20 million for select intellectual property and claims, subject to higher competing offers. The AI chatbot platform will keep operating during the process, which Character.AI says it hopes to conclude by late November or early December.
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The filing follows mounting legal pressure on Character.AI, including lawsuits over chatbots allegedly encouraging self-harm among teens and claims of unlicensed medical practice, suggesting litigation risk weighed heavily on the company's finances. Disney's involvement is notable given it had accused Character.AI of copyright infringement and harmful use of its characters just weeks earlier, so its bid for IP and claims could be read as a move to control how its characters are used going forward rather than simply acquiring technology.
- Character.AI filed for Chapter 11 and is selling substantially all its assets.
- Disney's $20 million stalking-horse bid is subject to higher or better offers from others.
- The bankruptcy follows lawsuits over self-harm, suicide, and unlicensed medical practice claims against Character.AI's chatbots.
Source: yro.slashdot.org, 2026-10-13
Published there as: “Disney Offers $20 Million For Character.AI Assets As Startup Files For Bankruptcy”
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