Vice Media Group, the once-hot digital media startup known for its edgy and provocative content, filed for Chapter 11 bankruptcy protection on Monday to engineer its sale to a group of its lenders.
The company, which publishes websites such as Vice, Motherboard and Refinery29, had been struggling financially for years amid a downturn in the online advertising market and the impact of the coronavirus pandemic. It had also faced allegations of sexual harassment and misconduct in its workplace culture.
The group of lenders, which includes Fortress Investment Group, Soros Fund Management and Monroe Capital, has agreed to buy most of Vice Media’s assets for $225 million and take on significant liabilities, listed at $500 million to $1 billion, according to the filing in a New York federal court. The lenders had previously invested in Vice Media and hold some of its debt.
The sale process will allow other parties to make higher bids for the company, which was once valued at $5.7 billion and had attracted big-name backers such as Disney and Fox. The deal is expected to close within two to three months, Vice Media said in a statement.
“This accelerated court-supervised sale process will strengthen the Company and position VICE for long-term growth,” co-CEOs Bruce Dixon and Hozefa Lokhandwala said in the statement.
Vice Media said it intends to keep paying its remaining employees and vendors throughout the process and to keep top management in place. The company had recently announced layoffs across its global newsroom and shuttered its international journalism brand, Vice World News. It also canceled its weekly broadcast program, “Vice News Tonight,” which debuted in 2016.
Vice Media was founded in 1994 as a Montreal-based punk magazine and expanded around the world with youth-focused content and a prominent social media presence. It became known for its immersive and often controversial reporting on topics such as drugs, sex, war and culture.
However, the company faced increasing competition from tech giants such as Google and Meta, which dominate the online advertising market. It also suffered from a loss of credibility and trust after several reports exposed its toxic and sexist work environment.
The bankruptcy filing marks a dramatic fall from grace for Vice Media, which once aspired to become the next CNN or MTV for the millennial generation.