A federal bankruptcy judge in Delaware on October 14, 2026 allowed Character Technologies Inc., the company behind Character.ai, to keep using its existing bank accounts, account numbers and payment channels while its Chapter 11 case runs, but limited payments on corporate card debts from before the filing to $10,000 until a final hearing on November 17.

In Short

A judge said Character.ai can keep using its normal bank accounts while it goes through bankruptcy, so money from app stores, Stripe subscriptions and advertisers keeps arriving in the same places. The company can only pay $10,000 of old credit card bills for now, and anyone who disagrees with the arrangement has until October 30 to say so. Nothing changes for advertisers paying the company today, but the final version of the order is not settled until a hearing on November 17.

What the judge signed

The document is docket entry 41 in case 26-11603 (BLS) in the US Bankruptcy Court for the District of Delaware, filed on October 14, 2026 and signed the same day by Judge Brendan L. Shannon in Wilmington. It is eight pages long and carries the full title "Interim Order (I) Authorizing Debtor to (A) Continue to Operate its Cash Management System, (B) Honor Certain Prepetition Obligations Related Thereto, and (C) Maintain Existing Business Forms; (II) Extending the Time to Comply With Section 345(b) of the Bankruptcy Code; and (III) Granting Related Relief."

It disposes, for now, of docket entry 9, the cash management motion Character.ai filed on October 13, one day after the petition. The order recites that the court heard "the statements in support of the relief requested" at a hearing, which was the first-day hearing scheduled for 1:30 p.m. Eastern on October 14. The PDF's metadata shows the file was created at 18:53 UTC and modified at 20:22 UTC that day, between 2:53 p.m. and 4:22 p.m. Eastern, so the order reached the docket within hours of that hearing.

Its operative first paragraph is short: "The Motion is GRANTED on an interim basis as set forth herein." Everything else in the 22 numbered paragraphs sets the terms.

Entry 41 sits inside a run of docket entries, numbers 34 through 51, all dated October 14, 2026, which is consistent with the court entering several first-day orders after the hearing. This article covers only entry 41. The other entries were not reviewed for it.

The dates that matter

The order fills in the blanks that the proposed version left open. PPC Land's report on the October 13 motions noted that hearing dates and objection deadlines were blank in every proposed order, waiting for a judge to be assigned. Now they are set:

  • Final hearing: November 17, 2026 at 10:00 a.m. prevailing Eastern Time.
  • Objection deadline: 4:00 p.m. prevailing Eastern Time on October 30, 2026.
  • Section 345(b) window: 30 days from entry of the order, or longer if the US Trustee agrees, which points to about November 13.
  • Service on banks: within two business days of entry.
  • Notice of new or closed accounts: within 15 days of the opening or closing.
  • "Debtor in Possession" legend on self-printed checks: within 10 days of entry.

Objections must be served on four parties: Character.ai's proposed counsel at Wilson Sonsini Goodrich & Rosati in Wilmington (Erin R. Fay, Shane M. Reil and Heather P. Lambert), the Office of the United States Trustee for the District of Delaware (Linda Casey), counsel to the Stalking Horse Bidder, and counsel to any statutory committee. If no one objects by October 30, "the Court may enter the Final Order without further notice or hearing."

The Stalking Horse Bidder is not named in the order. Elsewhere in the case it is Disney Worldwide Services, Inc., whose $20 million stalking horse bid for a non-exclusive license to certain intellectual property sets the floor for the sale. Disney's lawyers at Skadden, Arps, Slate, Meagher & Flom entered the case on October 13 while reserving jury trial and setoff rights. The service list gives Disney's counsel the same notice position as the US Trustee on how the company handles its cash.

The final hearing date is notable for its timing. November 17 falls within the late November to early December window the company gave on October 12 for finishing the sale, and before the outside closing date of December 17, 2026 that Houlihan's declaration set out. The cash system will therefore run on interim authority for most of the marketing period.

A $10,000 limit on old card bills

The only dollar figure in the order is in paragraph 9. Character.ai "is authorized to continue using the Corporate Cards and to pay in the ordinary course of business any amounts owing prepetition or post-petition on account of the Corporate Cards; provided, however, that payments on account of such prepetition amounts shall not exceed $10,000 in the interim period."

The cap lines up with the numbers in the motion. According to the cash management motion, the company's cards, issued through Ramp Business Corporation, historically ran at about $1,000,000 a month and had a balance of about $10,000 on the petition date. The motion said the cards were "primarily used to pay for recurring subscription charges for some of the Debtor's largest and most critical vendors." A $10,000 ceiling covers the reported balance and nothing more.

Post-petition card spending is not capped. That distinction matters because the cards pay for the software subscriptions the platform runs on. The company told the court that its "platform and operations can only run with the support of, among others, its vendors who are paid through the Debtor's use of the Corporate Cards." Under the order, those charges can keep running as long as they are incurred after October 12.

The order does not deal with a continuity problem raised in the wages motion: individual employees set up recurring vendor charges on cards in their own names, and 66 of the company's 86 full-time employees have accepted jobs at Disney. Who controls those subscriptions as staff leave is not addressed.

Same accounts, same numbers, same channels

Paragraph 7 is the provision with the most practical effect for anyone who pays Character.ai. The bank accounts "are deemed debtor in possession accounts," and the company may keep using them "in the same manner and with the same account numbers, styles, and document forms as those employed prior to the Petition Date." That includes deposits and withdrawals "by all usual means, including checks, wire transfers, ACH transfers, drafts, electronic fund transfers, and other debits."

The motion behind the order described seven accounts holding about $57.4 million in unrestricted cash on the petition date, plus a $2 million refundable deposit tied to the sale process, for $59.4 million in total. Roughly $38.6 million sat in an investment account at Morgan Stanley and most of the rest at Silicon Valley Bank, now a division of First Citizens Bank & Trust Company. Houlihan's declaration later showed that the $2 million deposit was part of the $7.5 million Disney paid up front.

According to the motion, "advertising partners" pay the company by ACH wire into the main operating account at SVB, alongside payouts from the Apple and Google app stores and insurance reimbursements for legal settlements. Web subscriptions processed by Stripe land in a separate receipts account. With the order in place, none of those routes needs to change. Ad networks and exchanges paying Character.ai do not need new remittance details, and the company does not need to open replacement accounts.

The scale of what flows through those accounts was set out in the chief executive's first-day declaration. Character.ai earns about $2.5 million a month from advertising and burns about $8.2 million a month, according to that filing. The cash management order is what lets those receipts arrive and those costs be paid without a break.

The investment policy survives

Paragraph 7 also lets the company "perform their obligations under the documents and agreements governing the Bank Accounts, including without limitation, their Investment Policy." Paragraph 12 authorizes the banks to "accept and hold, or invest, the Debtor's funds in accordance with the Debtor's instructions."

Read with the motion, that keeps in place the arrangement in which the Morgan Stanley account holds treasuries, commercial paper and money market funds, and SVB sweeps everything above a $1,000,000 floor in the operating account each night, sending 95% to a sweep account invested in government money market funds and 5% to an interest-bearing account. Paragraph 8 keeps the existing deposit agreements, "including, without limitation, the termination and fee provisions," in "full force and effect."

Thirty days on section 345(b)

Section 345(b) of the Bankruptcy Code restricts how a debtor can hold estate money. Deposits and investments must be insured or guaranteed by the US government, or backed by a bond, unless the court orders otherwise.

The motion had claimed that "all of the Bank Accounts are insured by the FDIC," a statement PPC Land found hard to reconcile with an investment account holding commercial paper and balances far above the $250,000 FDIC limit. The company also asked for extra time "to the extent that the Cash Management System does not strictly comply."

The judge did not decide whether the accounts comply. Paragraph 6 gives the company 30 days "to either bring such Bank Accounts into compliance with section 345(b) of the Bankruptcy Code or to make such other arrangements as are agreed to by the U.S. Trustee or approved by the Court," and leaves both sides free to come back to the court if no arrangement is reached. Any new account must be at a bank that has signed a Uniform Depository Agreement with the US Trustee for Delaware, or is "willing to immediately execute such an agreement." For banks that have not signed one, the company must use "good-faith efforts" to get them to do so.

Paragraph 5 adds an immediate step at banks that have signed such an agreement: the company must contact the bank, give it its employer identification number and identify each account as held by a debtor in possession.

Protection for the banks

Paragraphs 10 to 13 are written for the banks. They are "authorized and directed" to keep servicing the accounts "without interruption and in the ordinary course," and to honor checks, wires and transfers on post-petition claims or on prepetition claims "for which payment has been specifically authorized by this Court."

They may rely on Character.ai's word about which payments to honor. According to paragraph 11, a bank "shall not be deemed in violation of this Interim Order and shall have no liability" for following the company's directions, for acting in the good-faith belief that a payment was authorized, or for "an innocent mistake made despite implementation of reasonable item-handling procedures." Banks may also debit the accounts for undisputed prepetition bank fees, which the motion put at about $3,000 a month.

The result is that responsibility for keeping prepetition and post-petition money apart sits with the company. Paragraph 15 requires it to keep records "so that all transactions may be readily ascertained, traced, recorded properly, and distinguished between prepetition and post-petition transactions." The company and the banks may agree changes to the system without returning to court, as long as they are ordinary course and consistent with the order.

What the order does not decide

Paragraph 17 is a standard reservation. Nothing in the order assumes any contract under section 365, admits the validity of any claim, waives the company's right to contest claims, affects claims against third parties or commits the company to pay any claim or continue any program. Whether to keep paying is left "in the discretion of the Debtor."

The order finds that the requirements of Bankruptcy Rule 6003, which limits relief in the first 21 days of a case to what is needed to avoid immediate and irreparable harm, "are satisfied." It takes effect immediately, notwithstanding the 14-day stay in Rule 6004(h).

Drafting errors carried into the signed order

Several problems PPC Land identified in the proposed order on October 13 survived into the version the judge signed:

  • The US Trustee contact's email address still reads "Linda.Casey@usdoj.gov@usdoj.gov" in paragraph 2, with the domain repeated. This is the address objectors are told to serve.
  • The 15-day account notice runs after the account is opened or closed, as in the proposed interim order. The proposed final order had required advance notice, so the inconsistency between the two versions remains for November 17.
  • The text keeps referring to the debtor in the plural ("in their discretion," "their obligations," "their Investment Policy"), although Character Technologies, Inc. is the only debtor.
  • Paragraph 16 gives the 10-day deadline for the "Debtor in Possession" legend on self-printed checks, which differs from the 14 days the motion described.

None of these changes what the order authorizes, but the email error affects the practical mechanics of serving objections before October 30.

Why the order matters to advertisers and ad tech

Character.ai is a programmatic publisher with an ads.txt file listing Google, PubMatic, OpenX, InMobi, Teads, Outbrain and others as authorized sellers, as PPC Land reported when the company filed. For those partners, the interim order answers a narrow but practical question: where the money goes. It goes where it went before, into accounts now designated as debtor in possession accounts, under court supervision.

The order also separates old and new money. Banks may honor payments on prepetition claims only where the court has "specifically authorized" them, and the company must keep records that distinguish prepetition from post-petition transactions. For an ad partner, that means money owed before October 12 and money owed after it sit in different legal positions, even when both pass through the same account.

The broader questions remain open. The first-day motions asked to pay critical vendors and argued that the company's 163 million users are not creditors. Disney's offer covers a license to intellectual property and excludes user data, while the company has said it will run the platform through the sale. Whether the app and its advertising inventory survive beyond the sale is not something a cash management order can decide. What it does is keep the money moving for the next five weeks.

Timeline

Summary

Who: Judge Brendan L. Shannon of the US Bankruptcy Court for the District of Delaware; Character Technologies, Inc., the debtor behind Character.ai, represented by Wilson Sonsini Goodrich & Rosati; its banks, including Silicon Valley Bank and Morgan Stanley; the US Trustee; and counsel to the stalking horse bidder, Disney Worldwide Services, Inc.

What: An interim order (Doc 41) granting the company's cash management motion. It keeps the existing accounts, account numbers, investment policy and payment channels in place, designates the accounts as debtor in possession accounts, caps payments on prepetition corporate card debts at $10,000, gives 30 days to resolve section 345(b) compliance and shields the banks from liability for following the company's instructions.

When: Signed and filed on October 14, 2026, after the first-day hearing that afternoon. Objections are due by 4:00 p.m. ET on October 30, 2026, and the final hearing is set for 10:00 a.m. ET on November 17, 2026.

Where: Wilmington, Delaware, in Chapter 11 case 26-11603 (BLS).

Why: The company needs uninterrupted access to about $59.4 million in cash and its incoming payments, including advertising revenue paid by ACH into its SVB operating account, to keep the platform running through a sale process built around Disney's $20 million bid.