Vice Media Group, which was worth $5.7 billion (£4.5 billion) in 2017, could be acquired for $225 million.
The youth-oriented digital publisher stated that it will continue operations during the bankruptcy proceeding.
It added that it “expects to emerge as a financially healthy and stronger company within two to three months”.
Shane Smith, Gavin McInnes, and Suroosh Alvi founded Vice in 1994 as the fringe magazine Voice of Montreal. Vice presently operates in more than 30 countries.
It was once hailed as part of a vanguard of companies that would disrupt the traditional media landscape with edgy, youth-centric content encompassing print, events, music, online, television, and feature films.
In 2012, after visiting the firm’s office in Brooklyn, media magnate Rupert Murdoch tweeted, “Who’s heard of VICE media? An adventurous and intriguing effort to engage millennials who do not read or view traditional media. Global triumph.”
In the documentary My Journey Inside the Islamic State, a Vice journalist filmed alongside the terrorist organization in Syria. It also accompanied Dennis Rodman and the Harlem Globetrotters on their “sports diplomacy” journey to North Korea.
Recent works include documentaries about controversial influencer Andrew Tate and actor Sean Penn’s film about Ukraine’s president Volodymyr Zelensky.
However, the company’s revenue has remained stagnant for several years, and it has struggled to generate a profit. Also unsuccessful were Vice’s attempts to go public through a merger.
Joseph Teasdale, director of technology at Enders Analysis, told: “The problem with Vice and other similar websites is that they have never figured out a business model for free online journalism.”
Vice and other tech businesses emerged during the first dot-com boom.
“At the time, there was a tendency to treat everything like software, where you make an initial investment, attract a large number of users, and eventually become incredibly profitable,” he said.
“However, it turns out that content doesn’t work that way; if you want people to return to your website or to reach new people in new markets, you must continue to invest in new content.”
Mr. Teasdale stated that a portion of Vice’s content consisted of “pretty expensive journalism” involving international travel.
Last month, Vice announced layoffs following the cancellation of its premier television program.
BuzzFeed, an additional innovative online platform, recently announced that it would be winding down its news division and laying off 15% of its workforce due to severe financial difficulties and a decline in advertising revenue.
Bruce Dixon and Hozefa Lokhandwala, co-chief executive officers of Vice, announced the bankruptcy move as follows: “This accelerated court-supervised sale process will strengthen the company and position Vice for long-term growth.”
If these proposals fail, Vice Media’s lenders will purchase the publisher for $225 million.
Two to three months are expected to pass during the sale process.