Vice Media has filed for Chapter 11 bankruptcy protection in the Southern District of New York to expedite the sale of the company and secure its future. The media group is responsible for several news, lifestyle and technology websites, including Vice, Motherboard and Refinery29. The company's assets and liabilities have been estimated to be worth between $500m and $1bn.
A group of creditors, which includes Fortress Investment Group, Soros Fund Management and Monroe Capital, made a conditional bid for "substantially all of the company’s assets". The lenders have agreed to provide about $225m and would assume "significant liabilities" upon closing of the deal. The sale process, which should conclude in the next two to three months, would allow other parties to submit "higher or better bids" for the company, it added.
Vice's international entities and Vice TV, a joint venture with A&E Networks, are not part of the bankruptcy filing or the sale. The plan to sell the company comes weeks after the company announced a major restructuring that will result in dozens of job cuts and the end of its popular program "Vice News Tonight."
Many news, entertainment and technology companies have been hit hard by falling advertising revenue in recent months, leading several to slash their workforces and close down unprofitable divisions. In April, Buzzfeed announced that it would be closing down its news division altogether, while Paramount Media decided to call time on MTV News last week.
However, Vice is optimistic that the sale will give the company a new lease of life. Co-CEOs Bruce Dixon and Hozefa Lokhandwala said, "This accelerated court-supervised sale process will strengthen the company and position Vice for long-term growth. We will have new ownership, a simplified capital structure and the ability to operate without the legacy liabilities that have been burdening our business. We look forward to charting a healthy and successful next chapter at Vice."
According to the court filing, Vice has over 5,000 creditors. The three creditors involved in the bid process have provided $20m in cash to the company, alongside other financing commitments. "Vice anticipates that this financing, as well as the cash generated from ongoing operations, will be more than sufficient to fund its business throughout the sale process," it said. "The company expects to continue to pay employee wages and benefits without interruption and pay vendors and suppliers on normal terms."