Vice files Chapter 11, lines up $225 million sale to lender group

By Sarah Lizee

Olympia, Wash., May 15 – Vice Group Holding Inc. filed Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York on Monday to facilitate a sale to a consortium of its lenders led by Fortress Investment Group and including Soros Fund Management and Monroe Capital, according to a press release.

The deal is subject to higher and better bids from other parties.

The purchase price under the lenders’ stalking horse bid consists of $225 million in the form of a credit bid, in addition to the assumption of significant liabilities upon closing.

Vice has also obtained commitments for $10 million in new money debtor-in-possession financing from the lender consortium, as well as consent to use more than $20 million of cash that constitutes the cash collateral of the lenders.

The DIP financing also includes a $50 million rollup of prepetition senior secured term loans, with $25 million available following an interim order.

The company is seeking interim access to $5 million of the new money.

The DIP facility is set to mature in six months, subject to earlier termination if certain events occur.

Interest is SOFR plus 1,200 basis points, subject to a 3% SOFR floor. With respect to the new money, SOFR interest will be paid in cash and the additional 1,200 bps will be paid in kind. All interest on the rollup will be paid in kind.

There is a 10% commitment premium PIK fee, and a 6% exit premium PIK fee, unless the lenders acquire the assets of the debtors through the credit bid.

Vice said it anticipates that the financing, as well as the cash generated from ongoing operations, will be more than sufficient to fund its business throughout the sale process, which it expects to conclude in the next two to three months.

All of Vice's multi-platform media brands will continue to produce and deliver content across platforms, the company said.

Substantially all of the company's international entities, and the Vice TV joint venture with A&E, are not part of the Chapter 11 filing.

Vice has filed a number of customary first-day motions with the bankruptcy court seeking authorization to support its operations during the court-supervised sale process.

In its petition, the company listed 5,001 to 10,000 creditors, $500 million to $1 billion of assets and $500 million to $1 billion of liabilities.

Its largest unsecured creditors are Wipro LLC, based in East Brunswick, N.J., with a $9.91 million arbitration award claim, CNN Productions, based in Atlanta, with a $3.8 million third-party production claim, Antenna TV SA, based in Maroussi, Greece, with a $3.8 million consultancy services agreement claim and a $2.75 million trade debt claim, and Ernst & Young US, based in Pittsburgh, with a $2.14 million professional services claim.

Togut, Segal & Segal LLP and Shearman & Sterling LLP are serving as legal counsel, PJT Partners/LionTree are serving as financial adviser, and AlixPartners is serving as restructuring adviser.

Gibson, Dunn & Crutcher LLP is serving as legal counsel to the lender consortium, and Houlihan Lokey is serving as financial adviser.

Vice is a global multi-platform media company with headquarters in Brooklyn, N.Y. The Chapter 11 case number is 23-10767.

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