Bankrupt media company Vice Group Holding Inc. won court approval to sell its main business to a group of its lenders led by Fortress Investment Group, Soros Fund Management and Monroe Capital in a transaction worth roughly $350 million.
(Bloomberg) — Bankrupt media company Vice Group Holding Inc. won court approval to sell its main business to a group of its lenders led by Fortress Investment Group, Soros Fund Management and Monroe Capital in a transaction worth roughly $350 million.
Before the sale can close in the coming weeks, the lenders and Vice must negotiate a separate agreement covering how employees will be paid for about three months until Fortress sets up a new corporate entity to hold the business, lawyers said at a court hearing in Manhattan Friday.
The lenders “have been investors in the business for quite a while,” Fortress attorney David M. Feldman told the judge overseeing Vice’s bankruptcy case. Negotiating an agreement on how to pay the employees during their transition from Vice to the buyers will ensure that the lenders only take on costs related to the business and not to any bankruptcy-related legal fees, Feldman said.
The sale came after Vice tried to hold an auction that would raise as much money as possible to pay creditors. Instead, the company didn’t receive any other qualified bids for its assets, Vice said in a court filing, so decided to move forward with the Fortress-led offer it entered Chapter 11 with.
The deal is in the form of a credit bid, which allows lenders to use debt they’re owed toward the purchase of a company’s assets out of bankruptcy. The deal will let Vice keep operating with substantially less debt after exiting court protection. A hearing to approve the sale is scheduled for Friday.
Fortress increased the value of its offer to $350 million after earlier agreeing to a deal worth roughly $225 million when Vice filed for Chapter 11 in May, according to a filing submitted to court later on Thursday.
Vice’s filing was the end of a long fall for a company once valued at $5.7 billion. Fortress Credit Corp. ranked among the media company’s biggest secured creditors, with claims totaling about $475 million, the company’s petition showed.
The case is Vice Group Holding Inc., 23-10738, U.S. Bankruptcy Court for the Southern District of New York.
(Updates throughout with amended bid of $350 million)
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