USBankrupt Character.ai's sale to Disney draws fire from 32 states over rules that shut out rivals

Thirty-one states and Washington, D.C., objected in court to the rules for selling a license to Character.ai's technology, saying they tilt the auction toward Disney.

According to PPC Land on Oct 23, Character.ai asked the Delaware bankruptcy court to approve a sale with Disney as the opening bidder at $20 million. In a 27-page objection, the attorneys general argue the $21.7 million minimum overbid blocks rival offers above roughly $15.2 million that would net the estate more, since Character keeps the $5.5 million Disney already paid either way.

They want Disney's $700,000 fee cut and more time and access for rivals. A hearing on the bidding procedures is set for Oct 30.