Artificial intelligence startup Character.ai said on Monday it had initiated voluntary Chapter 11 bankruptcy proceedings in the U.S. ​and agreed to sell some of its assets ‌to Walt Disney for $20 million.

Here are some details about the bankruptcy and sale proceedings:

Character.ai said it has begun the formal ​process to sell assets, including a license ​of certain intellectual property, through Chapter 11 and is ⁠seeking court approval for auction rules that would designate ​Disney as the lead, or stalking horse, bidder.

Under this ​process, Disney's bid would set a baseline offer while allowing competing bidders to submit higher bids, and the company expects ​the sale process to conclude by late November or ​early December 2026.

"After a comprehensive review of the available alternatives, the ‌board ⁠determined that this court-supervised sale process provides the company with the best opportunity to maximize value for all stakeholders," said Colin Adams, CEO of Character.ai.

Character Technologies, ​the U.S.-based owner ​of the ⁠generative AI platform, listed estimated assets and liabilities between $50 million and $100 million, according ​to a court filing.

The company said it ​intends ⁠to continue operating its business, including the Character.ai platform, with minimal service disruptions during the sale process. If the ⁠process ​fails to produce a buyer ​willing to continue operating the platform, it will be wound down.