The streaming company says it filed for voluntary Chapter 11 reorganization at the U.S. Bankruptcy Court in NYC due to “the uncertain regulatory and legal climate” following the U.S. Supreme Court’s decision in June that Aereo must pay broadcasters to retransmit their free, over-the-air signals.
“Even with significant victories in the federal district courts in New York and Boston and the Second Circuit Court of Appeals, the reversal of the Second Circuit decision in June by the U.S. Supreme Court has proven difficult to overcome,” CEO Chet Kanojia says. “The U.S. Supreme Court decision effectively changed the laws that had governed Aereo’s technology, creating regulatory and legal uncertainty for the company. And while our team has focused its energies on exploring every path forward available to us, without that clarity, those challenges have limited our options.”
He adds that the Barry Diller-backed service has “traveled a long and challenging road. We stayed true to our mission and we believe that we have played a significant part in pushing the conversation forward, helping force positive change in the industry for consumers. We feel incredibly lucky to have had the opportunity to build something as meaningful and special as Aereo.”
The bankruptcy filing, Aereo says, is designed to help it preserve its value “without the extensive cost and distraction of defending drawn out litigation in several courts.” Lawton Bloom of Argus will serve as Chief Restructuring Officer.
Last month a U.S. District Court in NYC, citing the Supreme Court ruling, imposed a nationwide injunction on Aereo, granting a request by the broadcasters who opposed it. That appeared to leave the company with no future. It had hoped that the FCC or the U.S. Copyright Office might deem it the equivalent of a cable company, which might have opened opportunities to negotiate programming deals or offer local broadcast signals for a relatively small fee.
But the high court decision pretty much sealed Aereo’s fate. Diller said at the time that “it’s over.”