Vice Media Faces Bankruptcy: Three Lenders Compete for Majority Control of the Company

Vice's bankruptcy and BuzzFeed News' closure. Explore the implications, layoffs, and future of media brands amid changing dynamics. Stay informed on industry transformation.

May 15, 2023 - 09:28
May 15, 2023 - 09:30
Vice Media Faces Bankruptcy: Three Lenders Compete for Majority Control of the Company
Vice Media Faces Bankruptcy: Image Source: The Economic Times

Vice Media Group has officially filed for Chapter 11 bankruptcy on Monday morning following an asset purchase agreement reached with a consortium of its lenders.

In an official statement, Vice Media Group disclosed that the group of lenders, which includes Fortress Investment Group, Soros Fund Management, and Monroe Capital, has committed to a credit bid amounting to $225 million for "almost all of the company's assets."

Additionally, Vice Media Group revealed that these three creditors, poised to become the majority owners unless Vice Media Group attracts a higher bidder, have already infused $20 million in cash to sustain the company's operations during the forthcoming two to three months of the sale process.

Vice Reports Assets and Liabilities Ranging from $500 Million to $1 Billion

Vice Media Group has officially filed for Chapter 11 bankruptcy in the Southern District of New York recently, citing estimated assets and liabilities within the range of $500 million to $1 billion. The filing further revealed that Vice Media Group has a substantial number of creditors, exceeding 5,000.

Addressing the situation, Bruce Dixon and Hozefa Lokhandwala, the Co-Chief Executive Officers of Vice Media Group, expressed their optimism regarding the court-supervised sale process. They believe that this expedited procedure will not only strengthen the company but also position it for long-term growth. They highlighted the significance of maintaining Vice's unwavering dedication to authentic journalism and captivating content, as these elements have solidified Vice as a trusted brand among young audiences and a valuable partner for brands, agencies, and platforms.

According to Vice Media Group, the sale process is expected to conclude within the next two to three months, marking a pivotal moment in the company's restructuring efforts.

Vice's Media Brands: A Glimpse into the Future

Vice Media has assured that all of its diverse brands, such as Vice, Vice News, Vice TV, Vice Studios, Pulse Films, Virtue, Refinery29, and i-D, will persist in their operations and content production, as per the company's announcement. The Co-Chief Executive Officers, Dixon and Lokhandwala, emphasized that under the new ownership and a streamlined capital structure, Vice will be able to operate without the burden of legacy liabilities that have impacted its business.

Furthermore, Vice clarified that its international entities and the joint venture between Vice TV and A&E are not included in the Chapter 11 filing, ensuring their continuity separate from the restructuring process.

Vice Media's Bankruptcy Trails the Shutdown of BuzzFeed News

Following the recent closure of BuzzFeed News, Vice Media has now filed for bankruptcy. The timing of Vice's bankruptcy filing comes a few weeks after BuzzFeed News, which had previously received a Pulitzer Prize, announced its shutdown. Additionally, Vice Media has revealed its intention to reduce its workforce by 15%.

In a memo shared with USA TODAY, BuzzFeed's chief executive, Jonah Peretti, stated, "While layoffs are being implemented across various departments, we have determined that the company can no longer sustain BuzzFeed News as an independent entity."

Also Read: Morgan Stanley Announces Plan to Lay Off 3,000 Employees as Wall Street Continues to Cut Jobs

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