# Character AI Files Chapter 11 Bankruptcy

> Character AI files Chapter 11 bankruptcy and sells $20m assets to Disney.
- Title: Character AI Files Chapter 11 Bankruptcy · AI Insider
- Summary: Character AI files Chapter 11 bankruptcy and sells $20m assets to Disney. Character AI filed Chapter 11 bankruptcy and agreed to sell $20 million assets to…
- Keywords: character ai, chapter 11 bankruptcy, disney, asset sale, ai platform, unincorporated company, technology, Character, Files, Chapter, Bankruptcy, AI Insider
- Source: AI Insider — https://theaiinsider.tech/2026/10/13/character-ai-files-for-chapter-11-bankruptcy-and-agrees-20m-asset-sale-to-disney
- Author: James Dargan
- Published: 2026-10-13T17:10:41+00:00
- Read time: 1 min
- Topics: character ai, chapter 11 bankruptcy, disney, asset sale, ai platform, unincorporated company, ai, technology
## Character AI Files Chapter 11 Bankruptcy
Character AI, the platform that lets users create and chat with AI characters, has filed for Chapter 11 bankruptcy after five years of operation.
## Agrees $20M Asset Sale to Disney
The company has agreed to sell some assets to Disney for $20 million, along with a non-exclusive perpetual license to its technology.
## Disney Transition Services
Disney will provide transition services through former Character AI staff who joined it last month with former CEO Karandeep Singh Anand.
## CEO Colin Adams Statement
CEO Colin Adams said the board concluded that a court-supervised sale offered the best route to maximize value following significant legal, regulatory and operational headwinds.
## Expected Closing Date
The platform will keep running during the process, expected to close in late November or early December, but noted no buyer has emerged.
## Service Wound Down
The service will be wound down if no viable bid arrives.
## Key takeaway

Character AI filed Chapter 11 bankruptcy and agreed to sell $20 million assets to Disney.