Vice Media Group, popular for websites such as Vice and Motherboard, filed for bankruptcy Monday to engineer its sale to a group of lenders, capping years of financial difficulties and top executive departures.
The bankruptcy filing comes amid a challenging period for several technology and media companies, as they have resorted to downsizing in recent months due to a turbulent economy and a weak advertising market.
Vice was among a group of fast-growing digital media companies that once garnered rich valuations while courting millennial audiences. He rose to fame alongside his co-founder, Shane Smith, who built his media empire around a single Canadian magazine.
In April, the company said it would cancel the popular television show «Vice News Tonight» as part of a broader restructuring that would result in job cuts in the digital media firm’s global news business.
Last month, BuzzFeed Inc said it was shutting down its news division, which was renowned for its irreverent and insightful coverage, but ultimately succumbed to challenges from its digital-first business model.
Vice said the consortium of lenders, which includes Fortress Investment Group, Soros Fund Management and Monroe Capital, will provide about $225 million in the form of a credit offer for substantially all of the company’s assets and will also assume significant liabilities at closing.
Under an offer of credit, creditors can redeem their secured debt, instead of paying cash, for the company’s assets.
The company listed assets and liabilities in the range of $500 million to $1 billion, according to a court filing.
Vice said he received commitments for debtor-possessed financing from the lenders, as well as consent to use more than $20 million in cash, which he said will be «more than enough» to finance his business throughout the sale process.