Vice Media, a one-time digital publishing titan, filed for Chapter 11 bankruptcy on Monday, marking a dramatic fall from grace for a company once valued at $5.7 billion.
The Details: Vice's bankruptcy filing does not signal an end to its operations, however. Its various businesses, including the flagship website, ad agency Virtue, Pulse Films division, and women-focused site Refinery29, acquired by Vice in 2019, will continue to operate.
A group of lenders including Fortress Investment Group and Soros Fund Management is poised to acquire Vice for $225 million, covered by existing loans to the company. This group will also assume "significant liabilities" from Vice after the deal closes.
Investments from the Walt Disney Co
Vice, like its digital-media peers, bet big on the power of social media networks, hoping to capitalize on a rising tide of young, mobile readers that advertisers sought. While readership grew, digital ad revenue primarily went to major tech platforms, leaving new media companies struggling for profitability, according to the NYT.
The bankruptcy filing underscores the ongoing struggles of the digital media industry, with former new media darlings like BuzzFeed Inc
Vice's Co-CEOs, Bruce Dixon and Hozefa Lokhandwala, expressed optimism about the company's future, saying that the court-supervised sale process would "strengthen the Company and position VICE for long-term growth."
The lender consortium has also agreed to a debtor-in-possession financing, and the company expects to conclude the sale process within the next two to three months.
Despite the bankruptcy filing, Vice's international entities and the VICE TV joint venture with A&E, which is owned by Disney, are not part of the Chapter 11 filing.
