The organization responsible for the Vice and Motherboard online platforms has declared bankruptcy in the United States and is set to be purchased by a group of its creditors.
Once valued at $5.7bn (£4.5bn), Vice Media Group is potentially facing a takeover at a cost of $225m.
Despite filing for bankruptcy, the youth-oriented digital media company assured it will maintain operations throughout the process.
In addition, it conveyed that it “expects to emerge as a financially healthy and stronger company in two to three months”.
First launched in 1994 under the name Voice of Montreal by Shane Smith, Gavin McInnes, and Suroosh Alvi, Vice now has a presence in over 30 countries.
From print and events to music, web, TV, and movies, its cutting-edge content appeals to a youthful demographic.
Investors in Vice Media Group comprise Fortress Investment Group, Monroe Capital, and Soros Fund Management, the latter being the establishment by billionaire financier George Soros.
Vice had anticipated substantial financial gains from its ability to draw in millions of young readers via social media platforms like Facebook and Instagram.
However, most of the online advertising revenues have ended up in the hands of technology giant such as Google and Meta, which owns Facebook.
Vice has seen flat revenue for some time and has had difficulty achieving profitability. An attempt to go public through a merger also fell through.
Just last month, the company declared layoffs following the termination of its key TV show.
BuzzFeed, another pioneer in online content, also recently disclosed the closure of its news division and a 15% staff reduction due to severe financial issues and a dip in advertising income.
Vice Media has sought Chapter 11 bankruptcy protection, a mechanism that allows a US firm to delay payments to creditors, providing it with the opportunity to restructure its debt or sell off business segments.
Vice’s creditors have sanctioned $20m in funding to sustain the company throughout the bankruptcy process. During this period, other companies can present “higher or better” acquisition proposals for the media entity.
If such proposals do not succeed, Vice Media’s creditors will secure ownership of the publisher for $225m.
