Vice Media Group, known for its popular websites such as Vice and Motherboard, has filed for bankruptcy protection as part of its strategy to be sold to a consortium of lenders. This move marks the culmination of years of financial challenges and the departure of top executives.
The bankruptcy filing comes at a time when many technology and media companies are facing difficulties, leading to downsizing efforts in response to an unstable economy and a weak advertising market.
Vice was among the group of digital media ventures that experienced rapid growth and commanded high valuations while targeting millennial audiences. Its rise to prominence was closely tied to its co-founder, Shane Smith, who built the media empire starting with a single Canadian magazine.
As part of a larger restructuring announced in April, Vice stated its decision to cancel the popular TV program “Vice News Tonight,” which would result in job cuts across the company’s global news business.
Last month, BuzzFeed Inc also faced challenges related to its digital-first business model and announced the closure of its news division known for its unique and investigative coverage.
Vice has disclosed that a consortium of lenders, including Fortress Investment Group, Soros Fund Management, and Monroe Capital, will provide approximately $225 million in the form of a credit bid for most of the company’s assets. The lenders will also assume significant liabilities upon closing.
Through the credit bid, creditors have the option to exchange their secured debt for the company’s assets rather than make a cash payment.
According to a court filing, Vice has listed its assets and liabilities in the range of $500 million to $1 billion.
Vice has received commitments for debtor-in-possession financing from the lenders, along with the consent to use over $20 million in cash, which it believes will be more than enough to support its operations throughout the sale process.