Character.AI files for Chapter 11 bankruptcy, sells IP assets to Disney for $20 million

Character Technologies Inc. filed for Chapter 11 bankruptcy protection in Delaware and agreed that a Disney affiliate would pay $20 million for a non-exclusive license to certain IP, not the chatbot app itself, which could be wound down if no buyer emerges. The filing comes amid mounting child-safety litigation against the company, including the Kentucky case and earlier teen-suicide lawsuits.