Vice Media Group, popular for websites such as Vice and Motherboard, has filed for bankruptcy protection in the US today to engineer its sale to a group of lenders.
The move caps years of financial difficulties and top-executive departures.
The bankruptcy filing is a fallout of a challenging period for many technology and media companies that have been cutting costs to survive a weak advertising market amid slowing economic growth.
Vice said the lender consortium that includes Fortress Investment Group, Soros Fund Management and Monroe Capital will provide about $225m in credit bid for almost all of its assets.
The consortium will also assume significant liabilities at closing.
Under a credit bid, creditors can swap their secured debt, rather than pay cash, for the company's assets. Vice listed both assets and liabilities in the range of $500m to $1 billion.
"Creditors are taking it (Vice) over at a steep discount and we will find out whether they can become viable with a much slimmer capital structure coming out of bankruptcy," said Thomas Hayes, chairman at investment firm Great Hill Capital.
Vice was among a group of fast-rising digital media ventures that once had rich valuations as they courted millennial audiences.
It rose to prominence alongside its co-founder Shane Smith, who built his media empire from a single Canadian magazine.
Vice has received commitments and consent from the lenders to use more than $20m in cash, which it said will be "more than sufficient" to fund its business through the sale process.
The company had on April 27 said it would cancel popular TV programme "Vice News Tonight" as part of a broader restructuring of its news division.
A week before that, BuzzFeed said it would shut its news division.
"This climate coupled with a difficult equity raising environment due to higher rates is taking some of the smaller players out to pasture," Hayes said.
