Vice Media files for Chapter 11 bankruptcy to facilitate the sale

May 15 (Reuters) – Vice Media Group, best known for sites like Vice and Motherboard, filed for bankruptcy protection Monday to orchestrate its sale to a group of lenders, navigating years of financial hardship and the departures of its top executives.

Vice said the lender’s consortium, which includes Fortress Investment Group, Soros Fund Management and Monroe Capital, will provide about $225 million in credit offering for substantially all of the company’s assets and also assume significant liabilities upon closing.

Under a credit bid, creditors can swap their secured debts, instead of cash, for the company’s assets.

The company listed assets and liabilities in the $500 million to $1 billion range, according to the court filing.

Weiss said it has received commitments to debtor equity financing from its lenders, as well as approval to use more than $20 million in cash, which it said would be “more than enough” to fund its business throughout the sale.

The bankruptcy filing comes amid a difficult period for many technology and media companies, as they have resorted to downsizing in recent months due to a turbulent economy and a weak advertising market.

Vice was among a group of fast-rising digital media projects that once commanded rich ratings as they courted millennial audiences. It featured alongside its co-founder, Shane Smith, who built his media empire from a single Canadian magazine.

In April, the company said it would cancel the popular TV show “Vice News Tonight” as part of a broader restructuring that would lead to job cuts across the digital media company’s global news business.

Last month, BuzzFeed Inc (BZFD.O) said it would shut down its news division, which was notorious for its irreverent and investigative coverage but eventually succumbed to the challenges of its digital-first business model.

Additional reporting by Rahat Sandhu in Bengaluru. Edited by Uttarish Venkateshwaran

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