Utah-based VidAngel files for bankruptcy amid court battle against Disney and other studios

Vidangel is a Provo-based company that filters content from TV shows and movies and streams them.

VidAngel, a Provo-based streaming platform that edits content out of films and TV shows, has filed for Chapter 11 bankruptcy protection, its CEO announced Wednesday.

According to CEO Neal Harmon, VidAngel will “continue to offer our filtering service and to add new content.”

The Chapter 11 reorganization automatically puts on hold a federal lawsuit against VidAngel, confirmed Salt Lake City-based Brian Rothschild, an attorney for the company. For more than a year, the company has been locked in a legal battle with movie studios that said VidAngel sold altered versions of original content without paying royalties.

Through the platform, users watching films and TV series could filter out language, nudity, violence or other content they consider objectionable.

The movie studios argued that VidAngel streamed and altered the studios’ content without permission and didn’t pay for movie and television rights.

In December, a federal judge in California said that until the lawsuit is resolved, the company must stop operations regarding movies from Disney Enterprises Inc., Lucasfilm Ltd. LLC, Twentieth Century Fox Film Corporation and Warner Bros. Entertainment Inc. The 9th U.S. Circuit Court of Appeals sided with the movie studios in August.

In June, the company altered its service and launched a new platform.

The company originally purchased and stored DVD and Blu-ray copies of films it offered. Users virtually “bought” the programs, filtered out content they found objectionable and then “sold” the program back to VidAngel for credit on the site.

VidAngel argued that the method is legal because the company sells — rather than rents — programs to users. But because VidAngel doesn’t pay the same fees as other streaming sites, the movie studios said the Utah company “blatantly violates the Copyright Act and confers on itself unfair advantages.”

Now users connect their Amazon Video, Netflix or HBO accounts to the new platform and stream the edited programs through VidAngel.

The Utah company “captures a stream of each motion picture” through Netflix, Amazon Video and HBO and stores the edited program in its system.

Users then watch the edited films and series through VidAngel.

VidAngel says copyright owners are compensated for their content through the fees they charge licensed streaming services — such as Netflix, HBO or Amazon Video.

In September, VidAngel filed a lawsuit against several film studios, asking a judge to declare its new platform legal. The Chapter 11 reorganization allows the company to pursue said suit.