Vice has named a well-known restructuring guru to its board amid speculation that the company could be on the verge of bankruptcy, On the Money has learned.
After more than a year of trying to sell itself, Vice has brought in Mo Meghji — who served as Chief Restructuring Officer for Sears and Barney’s — to the board, sources said.
“Oftentimes, large, troubled companies will bring a restructuring expert to the board to guide the company through this process,” Perry Mandarino, co-head of restructuring and at B. Riley Securities, told On the Money.
The move reveals a new level of desperation and an increasing likelihood Vice will be chopped up and sold in pieces with shareholders being wiped out. Vice previously retained FTI and AlixPartners to explore restructuring. FTI is now suing to recover $1 million in fees.
“They hired a financial advisor a year ago — a year later and they’re losing money so they’re not paying their vendors…Fortress had to put in $30 million more so Vice doesn’t get the electricity shut off. ” David Wander, partner at Tarter Krinsky & Drogin told On the Money, referring to the failed auction last year.
“Sometimes bankruptcy is the only way to get a sale — and it seems like that’s what they’ll have to do because they haven’t been able to get the bride to the altar to close a deal,” he added.
At this point, bankruptcy is a possibility even if Vice manages to attract a buyer for its assets, some of which look appealing such as its TV studio and ad agency.
“In bankruptcy, a buyer can cherry-pick the assets and liabilities it wants to buy and assume” Mandarino added.
In a statement to The Post, a spokesperson for Vice said, “The VICE Board of Directors is undertaking a comprehensive review of options, including a potential sale of the company, and has engaged a range of advisors to assist in that effort. We’re excited about the response thus far – which reflects the unique power and value of the VICE brand and the opportunity for long-term growth and success.”
During the past few days, Vice CEO Nancy Dubuc departed and the company’s Global President of News & Entertainment Jesse Angelo left. Vice also recently took a $30 million loan from so-called “vulture fund” Fortress Investments that previously was part of a consortium that loaned Vice $250 million in 2019.
A report last month in the Wall Street Journal revealed Vice hasn’t been able to pay its bills — it owes millions including debts to vendors ranging from media measurement group Nielsen to $400,000 owed to a company named AIR.TV
It’s a dramatic fall from grace for a company that at its apex in 2017 was valued at $5.7 billion. Some insiders speculate that the total sum of its part at this point could be worth less than the $400 million it paid for the young woman-focused website Refinery 29.
At the height of its valuation, Vice was bringing in several hundred million in revenue. But that revenue has turned into a trickle, sources told On the Money.
Rich Greenfield, analyst at LightShed Partners says this is emblematic of the industry writ large. “A lot of these digital media companies got overinflated values and missed the window to sell and now they’re stuck,” Greenfield adds “I’m surprised Vice has been able to survive as long as it has; many people thought it would die several years ago.”