The well-known Vice Media Group, which owns websites like Vice and Motherboard, applied for bankruptcy protection on Monday in order to facilitate the sale of the company to a consortium of lenders, bringing to an end years of financial struggles and CEO exits.
According to Vice Media, the lender consortium, which consists of 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 and also assume a sizable portion of the company’s liabilities at the close.
A credit bid allows creditors to exchange their secured debt for the company’s assets rather than paying cash.
According to a court document, the corporation declared both assets and liabilities in the $500 million to $1 billion range.
Vice Media claimed to have secured more than $20 million in cash as well as debtor-in-possession financing commitments from its lenders, all of which it stated will be “more than sufficient” to support the operation during the selling process.
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Bankruptcy Among Other Challenges
The bankruptcy filing comes at a difficult time for a number of media and technology organizations, who have recently been forced to downsize because of the unstable economy and weak advertising market.
Vice Media was one of a number of quickly growing digital media companies that formerly attracted high valuations while courting millennial consumers. It gained notoriety with Shane Smith, a co-founder who established his media empire from a single Canadian magazine.
In April, the company announced that it will axe the well-liked TV show “Vice News Tonight” as part of a larger restructuring that would include job losses across the worldwide news division of the digital media company.
BuzzFeed Inc (BZFD.O) said last month that it would close its news division, which was known for its witty and in-depth reporting but eventually failed due to the difficulties of its digital-first economic model.
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