Disney seeks Character.AI staff and technology through bankruptcy deal that could sidestep lawsuits
Disney found a way to buy Character.AI without buying its lawsuits
What happened
Disney could acquire Character.AI’s staff and much of its technology stack while sidestepping ongoing legal issues if the deal is completed and approved by the courts. Bankruptcy filings say litigation and regulatory concerns deterred potential buyers, while a multistate investigation expanded to 46 states and territories. States participating in the bankruptcy proceedings reserved their rights to challenge any bankruptcy plan.
Why it matters
The proposed deal illustrates how a bankruptcy transaction could separate access to AI technology and staff from legal exposure, while leaving states room to challenge the outcome.
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