VidAngel announced on Thursday that they have filed a reorganization plan with Utah Bankruptcy Court and that they are ready to move forward by appealing a decision against them in the Central District of California and, if necessary, pay back the $62.4 million judgment. They filed for Chapter 11 bankruptcy in October 2017 to pause a copyright infringement lawsuit.
Disney, Warner Brothers, and 20th Century Fox were among the entertainment companies who filed a complaint against VidAngel in June 2016 for copyright infringement. At that point, VidAngel was allowing subscribers to watch films for $1 or $2 by purchasing the film electronically for $20 and returning it for $18 or $19 in VidAngel credit. This system allegedly allowed them to provide streaming content before it was available on licensed streaming services. The entertainment companies also complained that VidAngel allowed viewers to edit their products by blocking out swear words or violence from the streamed content.
As part of the response to the copyright lawsuit, VidAngel changed their business model, they currently offer a subscription that allows people to view their original content or connect VidAngel to their Netflix or Amazon account to add the option to “skip and mute any objectionable content,” according to their website.
The judge ruled in an order granting summary judgment that VidAngel was liable for copyright infringement. A June 2019 jury verdict set the amount of damages at $62.4 million.
“We’ve gone from threats of being shut down, to essentially being able to say ‘just send us the bill,’” said Neal Harmon, CEO of VidAngel. He says the reorganization plan means that VidAngel can now appeal the summary judgment ruling and the monetary judgment from the lawsuit from Disney, but Harmon also says if the appeal is unsuccessful they will be able to pay the judgment over the next fourteen years.
George Hofmann, VidAngel’s bankruptcy trustee, said in the statement on Thursday, “After entry of an adverse judgment in an amount that, initially, seemed insurmountable, the company’s business and revenues are growing, and the company is expanding into new lines of business. According to third party financial experts hired to advise me in the reorganization process, Vidangel’s robust growth makes paying the judgment in full feasible.”
Harmon was optimistic about VidAngel’s financial prospects as well. “Friends are shocked when they hear that 2019 was VidAngel’s best revenue year ever and we’re currently on track to blow that record out of the water in 2020,” he said. Harmon said the purpose of filing for bankruptcy near the end of 2017 was to pause the lawsuit and focus on growing the business. “VidAngel is turning a page in its history, and we believe that we now are moving forward stronger than we’ve ever been. VidAngel remains committed to helping you, the viewer, make entertainment good for your home.”
