Vice Media files for Chapter 11 bankruptcy to facilitate the sale

Vice Media Group, best known for its websites Vice and Motherboard, filed for bankruptcy on Monday in order to facilitate a sale to a group of lenders, following years of financial struggles and top-executive departures.

According to Vice, the lender consortium, which comprises Fortress Investment Group, Soros Fund Management, and Monroe Capital, will contribute around $225 million in the form of a credit bid for nearly all of the company’s assets as well as absorb major liabilities after close.

Creditors might use a credit bid to exchange their secured debt for the company’s assets rather than paying cash.

According to a court document, the corporation listed assets and liabilities in the $500 million to $1 billion range.

Vice stated that it has obtained commitments from lenders for debtor-in-possession financing as well as consent to utilize more than $20 million in cash, which it claims will be “more than sufficient” to fund its operations during the selling process.

The bankruptcy filing comes at a difficult time for several technology and media organizations, which have been forced to downsize in recent months due to a volatile economy and a sluggish advertising market.

Vice was one of a slew of fast-rising digital media companies that commanded exorbitant values as they courted millennial audiences. It grew in popularity with its co-founder, Shane Smith, who established his media empire with a single Canadian magazine.

The company announced in April that it will eliminate the popular TV show “Vice News Tonight” as part of a larger restructuring that would result in job cutbacks throughout the digital media firm’s worldwide news operation.

BuzzFeed Inc said last month that it would close its news division, which was famed for its humorous and penetrating coverage but eventually succumbed to the problems of its digital-first economic model.

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