Vice Media has filed for Chapter 11 bankruptcy in the US and is set to be bought up by its lenders for $225m, a fraction of its previous value.
The company comprises the flagship Vice brand as well as advertising agency Virtue, production company Pulse Films and Refinery29, its brand aimed at young women.
[Read more: Vice Media timeline from Murdoch money to bankruptcy in a decade]
Investors submit $225m bid on Vice after bankruptcy
The New York Times reports that daily operations will continue as normal as Vice enters a sale process. Lenders including Fortress Investment Group, Soros Fund Management and Monroe Capital have submitted a credit bid of $225m and will acquire Vice Media should no better bid emerge, Reuters reports. The group were reported by the Wall Street Journal earlier this month to be close to securing a $400m deal out of bankruptcy for Vice.
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In a credit bid, a lender may bid the amount of secured debt they hold over a bankrupt company instead of cash. Chapter 11 bankruptcy allows a company to stay in business and reorganise rather than being liquidated.
Fortress and Soros were among investors who in 2019 lent $250m to the struggling new media business. Vice raised a further $30m in debt financing from Fortress in February as cash was reportedly running low at the company.
The NYT reports that Vice investments including those by Disney and TPG, “which spent hundreds of millions of dollars, will be rendered worthless by the bankruptcy”.
Bankruptcy declaration follows plan to refocus content
Last month Vice announced “painful but necessary” cuts affecting its global news team, saying it would refocus on its digital video and news documentary businesses and platforms “where its biggest audiences are”. A week earlier, managers at Vice told Press Gazette the company was making a “long-term commitment” to live streaming platform Twitch.
During a 2017 funding round Vice was valued at $5.7bn. In the UK, Vice reported employing an average of 198 people during the 2021 financial year.
News of Vice’s bankruptcy comes weeks after Buzzfeed shuttered its Pulitzer-winning Buzzfeed News brand and digital-native publisher Insider laid off 10% of its US staff.
[Read more: From unlimited oysters to redundancies – WTF happened at Buzzfeed in the UK?]
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