Vice Media Files For Chapter 11 Bankruptcy
Trail-blazing youth brand Vice Media has formally filed for Chapter 11 bankruptcy protection.
The move, filed at the Bankruptcy Court for the Southern District of New York, is part of a plan to engineer a sale to a group of lenders.
As expected, the company’s biggest creditor, Fortress Investment Group, will make up part of a new ownership. Also including Soros Fund Management and Monroe Capital, the lending consortium will invest around $225M as a credit bid for almost all of the company’s assets. The trio will also assume significant liabilities at closing.
Vice Names Bruce Dixon & Hozefa Lokhandwala As Co-CEOs Following Nancy Dubuc Exit
A credit bid allows a creditor to swap debt for assets without paying cash.
Vice has listed both assets and liabilities in the range of $500M-$1B. Vice’s brands include Vice News, Vice TV, Vice Studios, Pulse Films, Virtue, Refinery29 and i-D.
The sale is expected to complete in about two to three months. Day to day operations remain unaffected by the bankruptcy filing, according to a spokesperson in the UK. The company has secured more than $20M from the lending consortium. Vice said this money, plus revenues from its businesses, “will be more than sufficient to fund the business throughout the sale process.”
Vice, which was valued at $5.7B in 2017, began considering bankruptcy after struggling to find a buyer.
That came after a tumultuous start to the year for the company, which saw Nancy Dubuc exit after five years, replaced by Bruce Dixon and Hozefa Lokhandwala, and the departure of Global President of News & Entertainment Jesse Angelo to launch his own production company. Vice also axed its Vice News Tonight program as part of wider restructuring.
Vice has been struggling with its finances for several years. This compounded the brutal environment for media and technology companies, many of which have made drastic staff cuts and cost savings to weather the unstable economy and weak advertising market. Another trailer-blazing digital firm, BuzzFeed, last month shut down its respected news division.
Vice launched as a magazine was known for its no-fear approach to journalism and digital video, becoming a world-leading youth media brand. Shane Smith, one of three original founders, ran the business as CEO from its founding until 2018, when he was replaced by former A+E Networks boss Dubuc. That followed persistent accusations of workplace sexual harassment and a pervasive ‘boy’s club’ culture, along with missed revenue targets and several exec changes.
In February, we revealed Dubuc had chosen to exit her role at the end of her contract.
“Vice serves a huge global audience with a unique brand of news, entertainment and lifestyle content,” said Dixon and Lokhandwala, VICE’s Co-CEOs in a statement today. “This accelerated court-supervised sale process will strengthen the company and position Vice for long-term growth, thereby safeguarding the kind of authentic journalism and content creation that makes Vice such a trusted brand for young people and such a valued partner to brands, agencies and platforms.
“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 completing the sale process in the next two to three months and charting a healthy and successful next chapter at Vice.”
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