Aereo Inc. said Friday that the video-streaming company has filed for Chapter 11 reorganization. The embattled startup, which allows users to stream television shows live onto their computers, made the announcement five months after the Supreme Court ruled against it in a copyright case brought by television networks.
“Chapter 11 will permit Aereo to maximize the value of its business and assets without the extensive cost and distraction of defending drawn out litigation in several courts,” CEO and founder Chet Kanojia wrote in a blog post on the company's website.
The startup, whose backers include IAC chairman Barry Diller, filed Thursday in U.S. Bankruptcy Court for the Southern District of New York. The company fired employees in New York and Boston a few weeks ago as it prepared to shutter its operations. It has appointed appointed Lawton Bloom, a principal at Argus Management Corp. in New York, to serve as its chief restructuring officer, TechCrunch reported.
Kanojia said the challenges the company faced in the wake of the Supreme Court ruling and entrenched media companies was too much to overcome. “While we had 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. The U.S. Supreme Court decision effectively changed the laws that had governed Aereo’s technology, creating regulatory and legal uncertainty," he said.
Aereo stopped service in June after losing the Supreme Court fight with the networks. The court ruled that the company’s digital-streaming operations used antennas to get programming over the air and that violated the networks’ copyrights. Since then, the company has been looking for a way to survive but had not been able to get the license needed to transmit programs under copyright law. In October, Bloomberg reported that U.S. District Judge Alison Nathan in New York granted a request from a number of networks for a temporary order blocking Aereo's service around the country.