Vice Media filed for Chapter 11 bankruptcy protection Monday to facilitate a sale of the company and safeguard its future, according to court documents and a statement from the struggling media group.
The company, which publishes news, technology and lifestyle websites such as Vice, Motherboard and Refinery29, made the filing in the Southern District of New York. The filing stated that the company had assets and liabilities worth between $500 million and $1 billion.
A group of creditors, which includes Fortress Investment Group, Soros Fund Management and Monroe Capital, had made a conditional bid for “substantially all of the company’s assets,” Vice said. The lenders had agreed to provide approximately $225 million, 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 chapter 11 filing or the sale process.
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.”
News, entertainment and technology companies have been buffeted by falling advertising revenue in recent months, leading several to slash their workforces and shutter unprofitable divisions. In April, Buzzfeed said it would close down its news division altogether, and last week Paramount Media called time on MTV News.
Sale will ‘strengthen’ Vice
Vice, however, is hopeful that the sale will give the company a new lease on life.
“This accelerated court-supervised sale process will strengthen the company and position Vice for long-term growth,” said co-chief executive officers Bruce Dixon and Hozefa Lokhandwala.
“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 more than 5,000 creditors. The three creditors involved in the bid process have provided $20 million 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.”