Vice Media files for Chapter 11 bankruptcy to facilitate sale

May 15 (Reuters) – Vice Media Group, popular for sites such as Vice and Motherboard, filed for bankruptcy protection on Monday to engineer the sale to a group of lenders, capping years of financial difficulties and top executive departures.

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

Under a credit bid, creditors can exchange their secured debt, rather than paying cash, for the company’s assets.

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

Vice said it received commitments for debtor-in-possession financing from its lenders, as well as agreement to use more than $20 million in cash, which it said will be “more than sufficient” to fund the business throughout the sale process.

The bankruptcy filing comes amid a challenging period for several 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-growing digital media companies that once commanded rich ratings as they courted millennial audiences. It rose to prominence with 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 result in cuts to the digital media company’s global news business.

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

Reporting by Rahat Sandhu in Bengaluru; editing by Uttaresh Venkateshwaran

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