Vice Media Files for Bankruptcy
Vice Media filed for Chapter 11 bankruptcy early Monday morning.
A group of lenders, which includes Fortress Investment Group, Soros Fund Management and Monroe Capital, have bid $225 million to purchase the company’s assets in addition to taking on “significant liabilities” upon closing. According to the Chapter 11 filing, Vice has estimated liabilities between $500 million to $1 billion.
The bankruptcy is a stunning fall from grace for a company that in 2017 was valued at $5.7 billion, the darling of cutting-edge media that purported to define media in the digital age.
Vice Media Is Prepping for Bankruptcy Filing, Seeks Buyer, Says New York Times
The filing states that Vice’ management “has determined that it is advisable and in the best interest of the Vice Group Companies to enter into a stalking horse agreement for the sale of substantially all assets and related auction procedures.”
In a “stalking horse” agreement, potential buyers are lined up in advance of the bankruptcy filing. The initial bid is meant to encourage other qualified bids and is subject to being topped by other bidders. If a qualified bid or bids are submitted, the bankruptcy court will run an auction to find the highest and most valuable bid.
“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,” Vice co-CEOs Bruce Dixon and Hozefa Lokhandwala said in a statement. “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.”
‘Vice News Tonight’ Canceled Amid Company Layoffs, Refocus on Digital Video and News Documentary
According to the Chapter 11 filing, Vice owes money to a variety of creditors, including $474,648,153 to Fortress Credit Corporation, $20,939,275 to Pulse Film owners Thomas Benski and Marisa Clifford and B&C 3, LLC, $9,841,275 to J.P. Morgan Chase and $539,732 to ConEdison for utilities.
It also owes nearly $10 million to the IT consulting firm Wipro LLC, $3.8 million to CNN Productions, and approximately $6 million to Antenna TV. Other creditors include Workday, Adobe, Ranker, Getty Images, Amazon Web Services, Piano Software, Salesforce, Wolftech, Asana, and Oracle.
Vice has obtained a $20 million loan to continue operating the company during the sale process. It has also filed motions with the bankruptcy court to authorize the continued payment of employee wages and benefits without interruption and the payment to vendors and suppliers on normal terms for goods and services provided on or after the filing date.
Who’s Really Buying Forbes? $800 Million Deal Backed by Sun Group, GSV (Report)
In a Q&A sent to employees, Vice noted that senior management will remain in place and that there are no expected changes to the Vice brand name.
Additionally, the company said it is “continuing to review all aspects of our business as we map out the future of Vice” and that any potential restructuring or layoffs in connection with the bankruptcy will be “based on the needs of the business and market conditions.”
Vice’s multi-platform media brands include Vice, Vice News, Vice TV, Vice Studios, Pulse Films, Virtue, Refinery29 and i-D. Substantially all of the company’s international entities and the VICE TV joint venture with A&E are not part of the Chapter 11 filing.
How Vice, Vox and BuzzFeed Blew the Future of Media