How Wipro May Have Played A Part In Vice’s Bankruptcy

Vice’s Chief Restructuring Officer, Frank Pometti, stated that Wipro may have played a part in Vice’s bankruptcy as they owed $9.9 million. This owed amount came after Wipro initiated arbitration proceedings against Vice Media in May 2020, which were connected to the termination of an agreement.

Indian IT major Wipro may have been one of the factors that precipitated Vice Media voluntarily filing for bankruptcy, the latter’s filings showed. The media group owes Wipro $9.9 million after the latter won an arbitration award. Wipro is Vice’s largest unsecured creditor.

Vice Media Group filed for Chapter 11 protection on May 15 in a New York bankruptcy court, with $834 million in debt and $350 million in assets.

In a court filing, Vice’s Chief Restructuring Officer Frank Pometti said that while the company relied on external funding — both debt and equity — to fuel its growth and fund expenses, it also resulted in the company “being burdened by a highly leveraged and unusually complex capital structure.”

However, while the company had been struggling and was facing a financial crunch, two factors made it inevitable that the company file bankruptcy — one of them was Wipro.

Pometti’s filings said that Wipro commenced arbitration proceedings against Vice Media in May 2020, which was related to the termination of an agreement. A Vice spokesperson had told Insider in February that the award “is the result of a failed outsourcing arrangement that VICE terminated some 3 years ago”.

The arbitrator ruled in favour of Wipro earlier in March, with the IT firm winning an award of $7.9 million plus interest at a rate of 9 percent, resulting in a total amount of nearly $9.9 million.

Wipro then approached the Supreme Court of the State of New York, and on May 4, got a judgment related to the arbitration award.

The company announced that George Soros has purchased Vice Magazine and will provide $225 million in the form of a credit bid for most of Vice Media’s assets.

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