The Delaware bankruptcy court has approved the rules for selling Character.AI's assets, setting a bid deadline of noon Eastern on 24 November 2026, Technobezz and other outlets reported. Disney's $20 million agreement, signed on 13 October, has been formally designated as the stalking-horse bid that others must beat.
What we know
According to reports of the order, approved on 4 November, an auction is scheduled for 1 December at 10am Eastern unless it is cancelled or adjourned. PPC Land reported a two-day sale hearing starting on 3 December, with objections to the sale due by 18 November.
The terms for rivals are steep. A competing bid must reach at least $21.7 million, reflecting Disney's price, its $700,000 break-up fee and a minimum increment. Disney's outside closing date remains 17 December. The company has said it will file the identity of the winning bidder after the auction, and if Disney prevails, seek approval of a sale to it.
The timetable was pushed back from an earlier draft that had bids due on 20 November and the auction on 23 November. Most objecting states dropped their opposition to the form of the order; Florida said it still objected.
Why it matters
The window is short for anyone wanting to buy a large companion platform, or parts of it, out of bankruptcy. Due diligence on safety systems, litigation exposure and user data will have to happen in under three weeks, during a holiday period. That favours the incumbent bidder, which already employs much of the former team.
A rival bid would be a useful signal of how strategic buyers value companion technology after a run of safety lawsuits. No bid would suggest the market sees these assets mainly as talent and IP, not as a consumer business worth rescuing.
What to watch
Whether any qualified bids are announced on 25 November, and what consumer-protection terms the states press for at the December sale hearing.
Written by the AI Companion Wire newsroom from public reporting, credited above. Image via Technobezz.
