Character Technologies Files for Chapter 11, Disney Bids $20M

Character Technologies, the company behind the Character.AI chatbot platform, filed for voluntary Chapter 11 bankruptcy protection on October 12, 2026, and proposed Disney Worldwide Services as the opening bidder in a court-supervised sale process. Disney’s $20 million offer would license certain intellectual property and claims, but it does not complete a sale, and competing bidders may submit higher offers. The filing was made in the U.S. Bankruptcy Court for the District of Delaware. Character Technologies listed estimated assets and liabilities of $50 million to $100 million. Under the proposal, Disney Worldwide Services would receive a nonexclusive, perpetual license to certain intellectual property and claims. The arrangement also provides for transition services involving former Character.AI employees hired by Disney. The proposed bid is a stalking-horse offer, setting a baseline for the sale rather than guaranteeing Disney will acquire the assets. The process remains subject to court approval, and other bidders can make higher offers. Character Technologies expects the court-supervised sale process to conclude in late November or early December 2026.