Character Technologies Files for Chapter 11

Character Technologies, the company behind the Character.AI chatbot platform, filed for voluntary Chapter 11 bankruptcy protection on October 12 and proposed Disney Worldwide Services as the lead bidder for a $20 million license to certain assets. The court-supervised sale is not complete, and competing bidders may offer more. The filing was made in the U.S. Bankruptcy Court for the District of Delaware. Character Technologies listed estimated assets and liabilities of between $50 million and $100 million. The company’s proposed arrangement would give Disney a nonexclusive, perpetual license to certain intellectual property and claims. It also includes transition services involving former Character.AI employees hired by Disney, according to the filing. Disney’s proposed offer would establish a starting point for an auction, rather than transfer the assets immediately. Court approval of the sale procedures and any higher bids could change the outcome. Character Technologies expects the process to conclude in late November or early December 2026. The company says it intends to keep Character.AI operating with minimal disruption while the sale proceeds.