Vice Media Files for Bankruptcy

Bankruptcy records filed Monday show that Vice is made up of a web of companies associated with its various businesses, including Pulse Films and Carrot Creative, an ad agency. The filings say Vice has outstanding debt of $834 million, dwarfing the amount Vice was recently in talks to sell for.

They also show Vice owes some of its biggest business partners millions of dollars. The company said it owed Wipro, an information technology firm, nearly $10 million. Justin Stefano, one of the co-founders of Refinery29, is owed more than $500,000, according to the filings. And Davis Wright Tremaine, a law firm that has represented Vice, has a claim of more than $300,000.

The bankruptcy filing will give the company some relief from its onerous debt load as its lenders, including Fortress, seek to salvage their investments. Vice Media raised a $250 million loan from Fortress and Soros Fund Management in 2019 as it struggled to make a profit. It has been in default on that loan for months.

“It’s the lender coming in and saying, ‘I’m done funding the losses — if I’m going to fund the losses, I’m going to take control of the company,” said Eric Snyder, chairman of bankruptcy at the law firm Wilk Auslander. “It’s not unusual for the lender to come in and tell the debtor, the borrower, ‘You’re putting this into bankruptcy, you’re going to make a motion to sell, we’re going to put in a first bid.’”

Fortress sees a continuing role at Vice for Shane Smith, the brash co-founder who became synonymous with the company’s gonzo journalism from exotic locales and oversaw a boundary-pushing culture that was rife with allegations of sexual harassment, according to a person familiar with the matter. Hozefa Lokhandwala and Bruce Dixon, co-chief executives at Vice, will also stay on.

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