Vice Media hits on restructuring gurus amid bankruptcy rumors: Sources

Vice has appointed a prominent restructuring guru to its board amid speculation that the company could be on the brink of bankruptcy, On the Money has learned.

Sources said that after more than a year of trying to sell itself, Vice brought in Mo Megji, who served as restructuring director for Sears and Barney’s, to the board.

“Often times, large troubled companies will bring on a board of directors a restructuring expert to guide the company through the process,” Perry Mandarino, co-head of restructuring and B. Riley Securities, told On the Money.

The move shows a new level of desperation and a growing possibility that Vice will be dismembered and sold piecemeal and the shareholders wiped out. Previously, Vice engaged FTI and AlixPartners to explore the possibility of a restructuring. FTI is currently suing for $1 million in fees.

“A year ago they hired a financial advisor – a year later they are losing money so they don’t pay their suppliers… Fortress had to invest another $30 million to keep Vice from going out of power. David Vander, partner at Tarter Krinsky & Drogin, said in an interview with On the Money, referring to last year’s failed auction.

“Sometimes going bankrupt is the only way to get a sale – and it looks like they’re going to have to because they couldn’t get the bride to the altar to close the deal,” he added.

For now, bankruptcy is a possibility even if Vice manages to attract a buyer for its assets, some of which look attractive, such as a TV studio and advertising agency.

“In the event of bankruptcy, the buyer can choose the assets and liabilities that he wants to buy and assume,” Mandarino added.

In a statement to The Post, a spokesman for Vice said: “The VICE Board of Directors is conducting a comprehensive review of options, including the possible sale of the company, and has engaged a number of consultants to assist in this effort. We are very pleased with the response, which reflects the unique strength and value of the VICE brand, as well as the opportunity for long-term growth and success.”

Over the past few days, Deputy General Director Nancy Dubuk left, and the company’s global president of news and entertainment Jesse Angelo left. Vice also recently took out a $30 million loan from the so-called “vulture fund” Fortress Investments, which was previously part of a consortium that gave Vice $250 million in 2019.

A report last month in the Wall Street Journal revealed that Vice is unable to pay its bills – it owes millions, including debt to vendors ranging from media measurement group Nielsen to $400,000 owed to AIR.TV. .

That’s a sharp drop for a company that was valued at $5.7 billion at its peak in 2017. Some insiders speculate that his total stake so far could be less than the $400 million he paid for Refinery 29, a website targeted at young women.

At its peak, Vice was bringing in several hundred million dollars in revenue. But that income has dwindled, sources told On the Money.

Rich Greenfield, analyst at LightShed Partners, says it’s emblematic of the entire industry. “Many of these digital media companies have inflated prices and missed the selling window, and now they’re stuck,” Greenfield adds. “I’m surprised Vice was able to survive this long; many thought that he would die a few years ago.”