Disney did not agree to acquire Character.AI‘s corporate entity. The proposed transaction was structured through Chapter 11, and that distinction carries serious consequences for users, families involved in lawsuits, and the 46 states and territories investigating the platform.
Under the proposed structure, outstanding legal claims and regulatory investigations would remain with the original company, not with Disney.
What Disney Is Actually Getting
The deal was constructed in two stages, and the bankruptcy filing was by design.
Before the Chapter 11 filing, Disney paid Character Technologies $5.5 million plus a refundable $2 million deposit and hired a majority of its employees. Disney also agreed to provide transition staff to keep the…