Burley Garcia|Vice Media, once worth $5.7 billion, files for bankruptcy

Vice Media,Burley Garcia the edgy digital media startup known for its provocative visual storytelling and punchy, explicit voice, filed for Chapter 11 bankruptcy early Monday.

A group of Vice lenders is set to purchase the embattled company'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. That group, which includes Fortress Investment Group and Soros Fund Management, lent it $20 million to keep it afloat during the sale process, during which other lenders can make higher bids.

"This accelerated court-supervised sale process will strengthen the Company and position VICE for long-term growth," co-CEOs Bruce Dixon and Hozefa Lokhandwala wrote in a statement. "We look forward to completing the sale process in the next two to three months and charting a healthy and successful next chapter at VICE."

Vice Media says it intends to keep paying its remaining employees and vendors throughout the process and to keep top management in place.

The company had tried without success to find a buyer willing to pay its asking price of more than $1 billion. Even that was a fraction of what investors once believed it was worth.

Investors valued the company, founded in 1994 as a Montreal-based punk magazine, at $5.7 billion in 2017. Vice earlier had attracted big-name backers, including 21st Century Fox and Disney. The latter invested a total of $400 million in the company but wrote it off as a loss in 2019.

Bankruptcy follows layoffs and high-profile departures

Last month the company announced layoffs across its global newsroom and shuttered its international journalism brand, Vice World News. (It still employs journalists overseas, however, and tells NPR it has no plans to stop covering international news.) It also canceled its weekly broadcast program, "Vice News Tonight," which debuted in 2016 and passed 1,000 episodes in March.

The company oversees a variety of brands, including the women's lifestyle site Refinery29, which it acquired in 2019 for $400 million. It also owns British fashion magazine i-D and in-house creative agency Virtue, among others.

Vice chief executive Nancy Dubuc exited the company in February after five years at the helm, a post she took on during a tumultuous time for the newsroom.

Newsroom reckoning over sexual harassment and misconduct

Vice Media fired three employees in December 2017 following complaints by a handful of employees concerning the workplace culture.

"The conduct of these employees ranged from verbal and sexual harassment to other behavior that is inconsistent with our policies," said Susan Tohyama, Vice's human resources chief at the time, in a company memo.

Soon after, co-founder Shane Smith stepped down from his post as CEO and the company hired Dubuc, a veteran media executive, to replace him.

"Platforms can and will change. Infrastructures can become more
streamlined, organized and dynamic. Numbers fluctuate," Dubuc wrote in a memo to staff introducing herself in 2018. "In the end, though, it is the content that each of you has a hand in crafting that makes us truly great. I see endless potential in VICE."

This February, as the board sought buyers to acquire the company, Dubuc bid Vice staff farewell in another internal memo praising the company's success despite "unprecedented macroeconomic headwinds caused by the pandemic, the war in the Ukraine, and the economy," she wrote. "I am proud to leave a Vice better than the one I joined."

Tough time for digital media

Vice is the latest casualty in a media industry decimated by a downturn in digital advertising and changing appetite for news.

Last month BuzzFeed News, which was hailed for capturing a rare young audience and won a Pulitzer Prize for international reporting in 2021, shuttered.

Other newsrooms, including NPR, CNN, ABC News and Insider also have carried out layoffs this year.