The bankrupt company behind Character.ai has named a lead bidder for everything Disney left behind — the app, the AI models, the brand and its users’ chat content — at $10 million in cash, and the buyer, Smirks and Pangs Acquisition LLC, was formed in Delaware the day before it was picked. Why it matters: the sale would put the conversations of roughly 163 million current and past users in new, undisclosed hands, over conditions that state attorneys general have been fighting to attach since October.
November 15, 2026
What was filed
In a notice filed on Saturday, November 14 in the U.S. Bankruptcy Court for the District of Delaware (Docket No. 164), Character Technologies named Smirks and Pangs Acquisition LLC as the additional stalking horse purchaser for all assets other than the Disney Target Assets. The price is $10 million in cash plus the assumption of certain liabilities, including cure costs on 55 contracts the buyer would take over — $2,684,462 in total by PPC Land’s calculation from the filing’s Exhibit B, almost all of it a $2,646,136 compute bill owed to DigitalOcean. The bid carries a termination payment of 3.5%, or $350,000. The purchase agreement itself had not been filed as of Sunday morning.
What the $10 million buys
Nearly the whole company. The schedule lists the Character.ai website and its iOS and Android apps; all AI models and weights, finished and unfinished; account and profile information, user-created characters, chat content, advertising and analytics data and training datasets; the compliance records behind them, including consents, ad opt-outs and age-assurance status; the trademarks, nine patents and nine domains, including character.ai and c.ai; and the ad monetization accounts that earned about $2.5 million in August 2026. Disney’s separate $20 million deal, by contrast, is a license that deliberately excluded personal data and finished models. On the company’s own first-day figures — about 163 million current and past users and roughly 12 million monthly active users — the cash price works out to about six cents per user.
A buyer formed the day before
Delaware records show Smirks and Pangs was formed on November 13, 2026, one day before its selection. The state listing names no members, managers or parent company, and the bankruptcy notice says only that the buyer has no connection to Character Technologies other than the agreement itself. Who owns it, who is funding the $10 million, and what it plans to do with users’ chat content are not in the public record; PPC Land has put those questions to the company’s counsel, Wilson Sonsini, with a response requested by noon on Monday, November 16.
The privacy fight is still open
This is the half of the estate the states have contested from the start. On October 14, attorneys general from 39 states and the District of Columbia set nine conditions for any buyer, among them honoring ad opt-outs, limits on training and advertising on chat content without consent, and a chance for users to delete their data before any sale. On October 29 the coalition said a consumer privacy ombudsman was necessary if user data were sold, and on November 12 the company filed competing proposed orders for an ombudsman appointment. The November 14 notice does not mention the ombudsman or the states’ conditions.
Why it matters
The clock is short. Objections are due by 9 p.m. Eastern on Wednesday, November 18, and if none is filed, the designation is deemed approved without a hearing. Bids are due November 24, the auction is set for December 1, and the sale hearing for December 3–4. For subscribers, the bottom line is simple: a platform people told their most personal conversations to is about to be sold, data included, to a buyer nobody can yet identify — and the next four days are the window in which the privacy safeguards states demanded either get attached or get left behind. That is worth watching whether or not you ever used the app.
Frequently asked questions
Who is Smirks and Pangs Acquisition LLC?
A Delaware limited liability company formed on November 13, 2026, the day before it was selected as lead bidder. Its owners and funding are not disclosed in the bankruptcy notice or state records.
Are users’ chats really part of the sale?
Yes. The asset schedule lists “chat content and related data” along with account information, advertising and analytics data, and the consent and opt-out records tied to them.
Can the $10 million bid be beaten?
Yes. It is a stalking horse bid — the floor for an auction set for December 1, 2026, with rival bids due by noon on November 24.
What happens next?
Objections to the designation are due by 9 p.m. ET on November 18. If none is filed, the designation is approved without a hearing; the sale hearing follows on December 3–4.
Sources: PPC Land, U.S. Bankruptcy Court for the District of Delaware (Docket No. 164)