Vice Media filed for Chapter 11 bankruptcy protection on Monday, May 15, to facilitate the planned sale of the company shortly and make the firm’s future more secure.
The company, which owns news, technology, and lifestyle websites such as Vice, Motherboard, and Refinery29, has applied to the Southern District of New York. This document contains information that the firm had assets and obligations in the amount of 500 million to 1 billion dollars.
A group of creditors, which includes Fortress Investment Group, Soros Fund Management, and Monroe Capital, made a conditional bid for almost all of the company’s assets. The creditors intend to provide about $ 225 million and are ready to assume obligations after the completion of a future transaction.
The process of selling the company should be completed in the next two to three months. This process will allow other parties to submit better offers for the firm.
The international divisions of Vice and Vice TV, a joint venture with A&E Networks, are not involved in the Chapter 11 filing and the sale.
The future change of ownership of the company became known a few weeks after the firm announced a major restructuring, which will result in the reduction of several dozen employees and the closure of the popular Vice News Tonight program.
News, entertainment, and technology companies have faced financial problems in recent months, which are the result of falling advertising revenue. The current state of affairs has caused layoffs and termination of unprofitable units. For example, in April Buzzfeed announced that it would close the news department.
Against the background of the unfavorable situation in the industry and the lack of trends of positive prospects, Vice expects that the sale of the company will be its reboot in a positive sense, implying an improvement in performance indicators.
Co-heads Bruce Dixon and Josefa Lokhandvala said that the accelerated sale process under the supervision of the court will strengthen the firm’s position and create conditions for long-term growth. According to them, as a result of this transaction, the company will have a new property, and a simplified capital structure and there will be no inherited obligations that complicate doing business.
Information contained in court documents indicates that Vice currently has more than 5,000 creditors. Three lenders involved in the application process provided $20 million in cash along with other financing obligations.
Vice expects that this funding and the funds received from current operations will be enough to create a basis for the functioning of the company during the sale. The firm intends to continue to pay salaries and benefits to employees and pay suppliers as usual.
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