💥Quiz: Is Buzzfeed Effed?💥
Buzzfeed Inc. ($BZFD) + Vanderbilt Minerals, LLC
Q2’26 is off to an awfully slow start. April is nearly over and thus far only two cases of any real size — Ascend Elements Inc. and QVC Group Inc. — have hit chapter 11 bankruptcy dockets.
“What are people doing out there?” one member of our team asked this morning. “Talking to headhunters,” Johnny cheekily responded, calling back to his own links:
He’s right.
But only half right.
The other thing people are doing out there is learning how to navigate artificial intelligence apparently.
And failing.
In his very same links 👆, Johnny pointed out a recent chapter 15 filing — The Prince Group — in the Southern District of New York. That filing reemerged yesterday when Sullivan & Cromwell LLP (“S&C”), as counsel to the liquidators appointed by legal authorities in the BVI who are pursuing the company and its owner Chen Zhi, submitted a letter to Judge Glenn, indicating that AI “hallucinations” had infiltrated legal pleadings, taking responsibility for the mistake(s). The internet — to the extent that “the internet” is represented by X (PETITION Note: it’s not) — had a field day, of course:
Though some were much more forgiving than others:
Of course we had to weigh in:
We can’t speak to whether even our own statement about owning it is 100% accurate. Per the FT:
Boies Schiller Flexner, the law firm representing Prince and Zhi, spotted the errors in S&C’s filing. In a document filed last week, BSF said words that S&C had quoted in its motion “do not appear in chapter 15 of the US Bankruptcy Code” and pointed to “multiple cited decisions” that were “misquoted or misidentified”.
It said a case cited by S&C in the motion “is not a case” and the reference was to “a different decision in a different circuit”.
It seems they had no choice, really.
In any event, this isn’t the first AI-related legal mistake and it won’t be the last. Let’s hope the big takeaway here for all lawyers, young and old, is that when mistakes are made, you acknowledge and take responsibility for them, offer apologies and solutions, and move on.
⏩One to Watch: Buzzfeed Inc. ($BZFD)⏩
Buzzfeed Inc. ($BZFD)(“Buzzfeed” or the “company”) is the NYC-based digital media company behind (i) the eponymous Buzzfeed, publishing pop culture content in articles, lists, and quizzes, (ii) HuffPost, focused on news and politics, and (iii) Tasty, a platform for food creators. The company initially focused solely on native advertising, content that the company creates for brand partners. Today, however, it generates revenue from (a) advertising (49% of FY25 Revenue), by way of traditional banner ads and pre- and mid-roll video ads; (b) content (20%); and (c) commerce (31%), which comes mainly from affiliate links to recommended products.
CEO Jonah Peretti founded the company back in ’06. Initially focused on aggregating viral content from across the internet, Peretti believed he could predict and ultimately manufacture internet virality with insights gleaned from careful analysis of user engagement data. Buzzfeed became a viral content machine, churning out quizzes and “listicles” designed to grab attention and spread across the internet via social media. The company tapped into and shaped the millennial zeitgeist of the early ‘10s. It mastered social media algorithms with irresistibly clickable content and forced other outlets to adapt, even as they sneered at Buzzfeed’s style. I mean really, who would want to read serious news and analysis mixed together with gifs and jokes?
As a digital-first media company, Buzzfeed rejected the old ways of traditional media; its site had no paywalls and no banner advertisements; it didn’t care if its content was read on its own site or elsewhere on the web; and it also didn’t care much for the distinction between advertising and editorial content.
Indeed, Buzzfeed was a pioneer in native advertising for the digital age; it partnered with brands to create sponsored content virtually indistinguishable from its editorial content. It also optimized both types of content to maximize reach via social media algorithm to further expand reach at no cost, which was great while it lasted.
As print media faltered, Buzzfeed grew. It raised hundreds of millions from venture capitalists and legacy media outlets. In ’12, it expanded beyond fun pop culture content into serious news, scooping up top-notch journalists like Ben Smith from Politico to be its editor-in-chief and opening bureaus around the world. It wanted to build a premium news organization made for social media, where readers were increasingly getting their news. The heavy investment in Buzzfeed News produced results, at least in terms of quality of journalism: Buzzfeed News rose in prestige and even won a Pulitzer Prize in ‘21 for its coverage of China’s maltreatment of its Uyghur population.
In ’14, it surpassed a $100mm in revenue and drew in over 150mm monthly viewers on its site and many more elsewhere. That same year, Andreesen Horowitz invested $50mm at a $850mm valuation. NBCUniversal (part of Comcast Corp. ($CMCSA)) invested $400mm in ’15 and ’16, transactions that ultimately valued the company at $1.7b.
The strategy of relying on social media distribution, however, was already starting to show cracks for Buzzfeed and its peers in digital media and traditional media. For a long time, skeptics had pointed out the flaws in the model, chiefly that its native advertising was expensive to execute and impossible to scale, and that the company had no control over its distribution. Suddenly those skeptic’s premonitions were coming true.
In ’13, Buzzfeed News was publishing headlines like this:
A few years later, Facebook started to de-prioritize publishers after facing tremendous blowback from its role in the spread of misinformation. By ’17, Peretti was taking shots at Facebook and Google:
“The media is in crisis. Google and Facebook are taking the vast majority of ad revenue, and paying content creators far too little for the value they deliver to users.”
Facebook continued to tinker with its algorithm in ways that hurt Buzzfeed and other publishers in the years to come. The rise of TikTok heralded another seismic shift in digital media, with users and platforms increasingly preferring short-form video content over all other content. Buzzfeed invested heavily in video and was able to produce content that spread, like the viral cooking videos it offered under its Tasty brand. But video is even more expensive for publishers to create, and short-form videos cannot be monetized as well as longer videos or other media types (there’s no place for mid-roll ads, banner ads, and the like). Social media platforms also increasingly worked to discourage users from leaving their “walled gardens” and realizing that publishers now needed them more than they needed the publishers, kept more and more of the advertising economics for themselves.
Against this backdrop, growth at Buzzfeed slowed, and the company reportedly missed its revenue estimates in ’15, slashed them for ’16, and then missed again in ‘17.
It was then that Buzzfeed began to diversify its revenue streams. In ’17, it adopted the programmatic advertising it had long eschewed. The next year, it launched Buzzfeed Reviews in a bid for affiliate revenue.
Still, rumors of an ’18 IPO fell away, and Buzzfeed had its first layoffs, cutting 100 jobs in November ’17. It reorganized and restructured its advertising and video teams in ’18. In January ’19, it laid off 15% of its staff, some 250 people. In ’20, it shuttered certain international outposts of Buzzfeed News, all in a bid to achieve profitability.
The company decided that the way forward for Buzzfeed and the digital media industry was consolidation. In February ’21, Buzzfeed acquired HuffPost from Verizon Communications Inc. ($VZ) in a stock deal. In December ’21, it went public via SPAC — because of course it did, 🙄 — with plans to use its newly public equity as currency for acquisitions, beginning with Complex Networks which it would acquire for $300mm concurrently with the de-SPAC transaction.
The de-SPAC transaction was a complete fiasco even by the hellaciously low standard we use to judge SPACs. Buzzfeed raised only $16mm from the transaction, rather than the $288mm it had planned on, after SPAC investors behind 94% of the money-raised chose to redeem their shares rather than own this 💩. The stock closed down 11% on its first day of trading and kept on plunging.
Excluding the impact of acquisitions, Buzzfeed’s revenue has declined in every year since its December ’21 de-SPAC.
Buzzfeed began axing staff almost immediately. First at HuffPost in March ’21 and then at Complex Networks and Buzzfeed News in March ’22. It announced a larger restructuring effort in 4Q22, affecting 12% of its staff.
Four months later, Buzzfeed announced that it would cut another 15% of staff and shutter its Buzzfeed News entirely. On the decision, Peretti said,
“I made the decision to overinvest in BuzzFeed News because I love their work and mission so much. This made me slow to accept that the big platforms wouldn’t provide the distribution or financial support premium, free journalism purpose-built for social media. More broadly, I regret that I didn’t hold the company to higher standards for profitability, to give us the buffer needed to manage through economic and industry downturns and avoid painful days like today.”
With Buzzfeed News shut down and disbanded, Buzzfeed consolidated all its reporting activities under the profitable HuffPost.
Still, revenue kept declining, and earnings, margins, and FCF remained ugly.
In ’24, Buzzfeed began to dispose of the Complex Networks properties it had acquired for $300m — piecemeal. It sold Complex for $108mm in February ’24 and First We Feast (the company behind “Hot Ones”) for $83m in December ’24. The proceeds of each sale were used to pay down debt.
Rounds and rounds of layoffs and divestitures shrank the company from over 1,500 employees in ’21 to only 500 today.
The shell of Buzzfeed that remains has now pinned its hopes on AI to save it. In January ’23, Alexandra Bruell at The Wall Street Journal reported that Buzzfeed planned to embrace Open AI’s Chat-GPT to create content. First, it was images used in articles, then personalized quizzes, and ultimately full articles created in whole or in part by AI. The new AI content has been underwhelming, but Peretti has not been deterred. Just last month, March ’26, Peretti debuted a slew of new AI apps to a crowd at SXSW that was decidedly unenthusiastic.
Buzzfeed has slashed its staff and other expenses, sold off the crown jewels, and attempted one pivot after another. This latest AI app pivot came just days after releasing its ’25 10-K with a going concern warning.
Buzzfeed ended the year with a grand total of $79m of debt outstanding and only $8.5mm of unrestricted cash.
Buzzfeed previously raised $150m of 8.5% convertible notes due ’26 (“the ‘26 converts”) in connection with its ’21 de-SPAC. It repurchased $120mm of the ’26 converts in ’24 with cash from its dispositions and retired the remaining $30m in’25 with the proceeds of a new loan from Sound Point, who seems likely to be Buzzfeed’s next owner.
In May ’25, the company borrowed $40m from Sound Point on a first lien basis at S+650. In August ’25, the Company borrowed an incremental $5m that was to be repaid in February ’26. Surprise, surprise, BuzzFeed has not repaid it, and has instead secured multiple short-term extensions. The incremental $5m is now due April 30, 2026, and the Company owes an additional 200bps of interest until such time as it is repaid. The credit agreement also requires Buzzfeed to maintain minimum cash of $5m and to repay a further a $15m in August ’26.
The company also has $15m of film financing debts due between now and December ’27 and another $18m of standby letters of credit outstanding in favor of the company’s landlords.
Buzzfeed has outlasted many of its digital media brethren –– Gawker filed for bankruptcy in ’16 with massive legal liabilities, Vice Media filed in ’23, Vox Media is reportedly trying to sell itself now. We expect it is only a matter of time before Buzzfeed follows suit and files or otherwise hands the keys to its creditors at Sound Point.
⚡Update: (Envi)Vanderbilt Minerals, LLC⚡
Hey, Johnny, throw on a classic Queen jam, will ya?
That’s just the one, thanks.
Back in February ‘26, mineral miner Vanderbilt Minerals, LLC (the “debtor”) filed a chapter 11 sale case in the Northern District of New York (Judge Kinsella) roughly fourteen years into the making. We covered it the same month:
The debtor took on its current form in ‘13 as part of a ring-fencing exercise by its predecessor-in-interest R.T. Vanderbilt Company, Inc. (“RTVC”). Pursuant to the exercise, RTVC separated* its intertwined chemicals and minerals businesses due to the latter’s increasing propensity to attract talc-related asbestos lawsuits — after having exited that line of business altogether in ‘08 — resulting in the following corporate structure:
It was a good decision; the lawsuits only ramped up from there. For example, at the end of ‘19, the debtor had 307 cases pending against it, and by the petition date, that figure had grown to ~1.4k (~4.6x). As you’d expect, litigation costs also skyrocketed, peaking at ~$8mm in ‘25, and the debtor’s liquidity suffered, driven in part by an August ‘25, ~$12.2mm judgment entered against it, which it couldn’t pay. Indeed, by the petition date, the debtor’s liquidity position had deteriorated to ~$1.3mm.
By then, proposed debtor’s counsel Jones Day (“JD”) was on the scene, working with financial advisor Applied Business Strategy LLC (“ABS”) to concoct a bankruptcy strategy. In fact, it was already underway; in the prior months, they adjusted and amended intercompany debts and contractual arrangements between the debtor and its affiliates.
There was just one problem: JD represented the debtor’s parent R.T. Vanderbilt Holding Co., Inc. (“Holding”) and other affiliate entities in that chart ⬆️ during the adjustment process and all the way until September ‘25,** and the ultimate plan that emerged was premised on an intercompany, self-described “… three-legged stool.”
The first leg was a sale. In August ‘25, the debtor retained Greenhill & Co. Inc. (“Greenhill”) as i-banker, which ran a marketing and sale process and uncovered that nobody was interested in buying the debtor’s assets on a standalone basis. Which made sense. You see, as part of the corporate reshuffling, the debtor’s sisterco Vanderbilt Chemicals, LLC (“VC”) received a few key things that the debtor used in its mining ops, including a plant in Murray, KY, a mine in Arizona, and a mill in NY (collectively, the “VC assets”), and without them, it was high unlikely there’d be any suitor. So VC agreed to convey those assets to the debtor for a price.
Here comes the second leg. The price was a settlement between (i) the debtor — negotiated by its special committee composed of Ben Pickering and represented by Katten Muchin Rosenman LLP — and (ii) Holding and its non-debtor affiliates, which entailed moving the assets over from VC to the debtor, burying lingering intercompany issues, and mutually releasing claims. With the settlement in hand, Commodore Materials, LLC (“CM”) emerged as the stalking horse for both the debtor’s assets and the VC assets for an all-in price of ~$50mm, provided the lot was cleansed in a “free and clear” sale.
Finally, the third leg. Financing. You can’t run a chapter 11 on $1.3mm, so CM, through an affiliate, reached into its pocket and pulled out a $15mm DIP, to be credit bid against the purchase price. But the timeline it imposed was tight — the sale order had to be entered by no later than April 7, 2026, which … *checks calendar* … didn’t happen.
The legs depended on each other, and while all three were problematic for the US trustee (the “UST”) and the official committee of unsecured creditors (the “UCC”) — represented by Brown Rudnick LLP (David Molton, Jeffrey Jonas, Eric Goodman) (“Brown Rudnick”) and Caplin & Drysdale (Kevin Maclay, Todd Phillips) as legal counsel — which happened to be entirely composed of talc claimants and their lawyers,*** the settlement and, really, the debtor release embedded in it, irked them the most.
Why? Because of Emoral claims.
We’ll forgive you if you’re not familiar with the term. The UCC will even do you one better. Here’s its description of ‘em in … its motion to outright dismiss the bankruptcy case:
“Emoral Claims are based on a controversial rule that treats tort victims’ claims (based on injuries that the tort victims suffered) against non-debtors based on the doctrines of alter ego, veil piercing, and successor liability as ‘estate claims.’ Under this rule, tort claims belonging exclusively to tort victims outside of bankruptcy become, upon the filing of the bankruptcy case, estate property inside bankruptcy.”
Those stem from the 2013 ring-fencing exercise. Before then, there was only RTVC, and it and its advisors had been careful when going under the knife. They made sure that only the debtor have direct talc-claim exposure. So plaintiffs’ lawyers plaintiff lawyered, and worked up theories to gain access to reorg-removed assets like the chemicals biz.
The release, which is broad enough to soak up Emoral claims, looked to put a pin in that. Therefore, the docket is a catastrophe. See ⬇️:
On February 24, 2026, a pre-UCC consortium of plaintiffs’ firms and an overly zealous UST objected to the all-encumbering, “… brutally short timeline …” DIP (here and here);
On March 3, 2026, those same parties objected to the debtor’s bidding procedures (here and here), arguing the VC assets need not be included in a sale and, again, the timeline was too fast.
On March 10, 2026, the UCC docketed the aforementioned motion to dismiss before throwing in its own bidding procedures objection the next day;
On March 17, 2026, the UCC tossed in another DIP objection;
Then it started getting personal. On March 24, 2026, the UST objected to the retention apps of JD, ABS, and debtor co-counsel Bond, Schoeneck & King, PLLC (“BSK”) for their prior representation of, or work for, Holding and other affiliate non-debtors.**** Meanwhile, the UCC focused its efforts solely on JD, citing heavily to the a$$-whooping Brown Rudnick dished out in last year’s Exactech, Inc. cases (which Johnny covered extensively);*****
On April 2, 2026, the UCC filed a motion to compel production of debtor-affiliate communications and materials, including “… veil-piercing or alter-ego theories”;
On April 8, 2026, each of the UST and the UCC dropped its objection (here and here) to the proposed settlement between the debtor and its affiliates;
We won’t delve into the minutiae of the subsequent 17+ hours of hearings …
… but it’s been a proper sh*tshow. The timeline, of course, also suffered. On March 26, 2026, the court placed it back on the tracks via a three-week-delayed bidding procedures order that extended the process about a month …
… and which contains a number of tweaks, including allowing parties to bid on debtor-only assets (and requiring them to allocate value to any VC assets). Although as recently as April 17, the debtor reported it had received precisely zero other bids.
Other than approval of those procedures, progress has been slow. As. Sh*t. Two months in, there ain’t a final DIP — the debtor has survived off further milestone-pushing interim orders that trickled $8.5mm of aggregate funding into the estates (second interim here and third here) — there ain’t an approved settlement, and there ain’t an approved sale.
Most notably of all, there … um … well, let’s turn to the transcript at an April 15, 2026 hearing on the JD retention application:******
“The timeline demonstrates Jones Day was actively representing the debtor’s affiliates while exploring and recommending legal strategies and actions that may negatively impact this estate, including, and perhaps not limited to, potential setoffs and asset transfers. The Court should not have to get to the merits and propriety of those transactions to find Jones Day without conflict… Here, Jones Day is intertwined with the debtor’s affiliates, creating a strong appearance of impropriety and divided loyalties. There will always be doubts about whether Jones Day possesses a predisposition that renders a bias against the estate, and whether the firm can carry out its current fiduciary duty to maximize the debtor’s recovery for the benefit of the estate and its creditors. This undermines the firm’s ability to perform as faithful bankruptcy counsel… Approving the retention would compromise the integrity of the bankruptcy process in this very case, and the Court is not willing to do that.”
Hence the tune at the top. The kicker? We’ll turn back to the court:
“The Court understands that this is a bomb, that it just dropped, with two days of trial starting tomorrow.”
The trial covering the proposed settlement, the final DIP, and the UCC’s motion to dismiss.
Which brings us back to proposed buyer and DIP lender CM. This can’t be what it had signed up for, and the DIP was nearing an April 20 settlement milestone. Is it okay with the disaster?
In response to a court inquiry on kicking the trial out a week, CM’s counsel, McDonald Hopkins LLC’s David Agay had this to say:
“We’re not willing to extend the milestones under the DIP. We need to move forward with the intercompany settlement hearing tomorrow and Friday. We are not only a stalking horse bidder here, but we’re the senior secured creditor of the estate. We are super concerned about the administrative burn and the professional fees in this case… we’re not going to fund $15 million into the estate with this Sword of Damocles hanging over us… if the court is not going to approve of the intercompany settlement between tomorrow and next week, then we have to proceed to exercise our remedies to recover our loan … if, in fact, the order’s not entered by the 20th, my client’s going to probably instruct me to immediately start exercising remedies under the DIP order.”
So “… much to its dismay …” and having received signoff to push the DIP and motion to dismiss hearings to April 23, the court went forward with the settlement hearing on April 16 and 17.
We’ll get to see the verdict later today. Because notwithstanding that spiel ⬆️, CM blinked and gave two additional days to the court, and it’s ruling this afternoon at 3pm ET.
We won’t speculate how it’ll go — no doubt, NDNY ain’t about to top any filer’s venue list — but if the settlement isn’t approved it sure as sh*t doesn’t look like it’ll be a good outcome for GUCs — including talc claimants. CM will ask for the case to convert, and those (weak) alter ego, veil-piercing, etc. claims against non-debtor affiliates? They’ll probably get zeroed out too. Per Holding:
“… the Non-Debtor Affiliates are not a large business, have not paid out substantial dividends to shareholders in the relevant six-year lookback period under Delaware law and have approximately $30 million of secured debt in addition to various equipment financings that is senior to any hypothetically successful litigation claims. Any suggestion that a liquidation and litigation path would result in a more favorable recovery to the Debtor’s stakeholders is divorced from economic reality.”
Sub-optimal? Yeah, we’d say so. Either way, it’s not JD’s problem any more. Assuming the settlement is approved, the court will take up the DIP and the UCC’s motion to dismiss on Thursday and Friday.
*Well, formally “separated.” Even though independently housed these days, the businesses still very much rely on one another, and they have various agreements in place for the sale and purchase of goods and services from each other and affiliates.
**ABS stopped working for Holding and its non-debtor affiliates in May ‘25.
***A fact that wasn’t lost on anybody. Speaking to it and defending the settlement, here is special committee member Ben Pickering:
“The Committee is composed entirely of talc-asbestos tort claimants… Each of the seven Committee members is represented on the Committee by a personal injury law firm that simultaneously represents individual tort claimants in litigation against the Debtor.[] Those firms have a direct interest in maximizing recoveries for their individual clients through a race to the courthouse—an interest that is structurally different from, and may conflict with, the Committee’s fiduciary obligation to maximize distributable value for the entire creditor body. The Committee’s motion reflects that tension: it seeks outright dismissal, which would return the parties to individual litigation and likely result in the Debtor’s liquidation, instead of a chapter 11 case that preserves the Debtor as a going concern and maximizes value for all unsecured creditors.[] That posture is difficult to square with the Committee’s obligation to represent the interests of all unsecured creditors.”
****The UST also had objections to parts of Greenhill’s, special committee counsel Katten Muchin Rosenman LLP’s, and claims agent’s Verita Global’s retention apps, but for nothing to write home about (e.g., proposed evergreen retainers). Those, as well as the objection to BSK, all settled.
*****Here, here, here, here, here, here, and here.
******A day prior, ABS was spared the embarrassment of getting bounced, and the UST settled its retention beef with BSK.
📚Resources📚
We have compiled a list of a$$-kicking resources on the topics of restructuring, tech, finance, investing, and disruption. 💥You can find it here💥.
📤 Notice📤
Amalia Sax-Bolder (Partner) joined Reed Smith LLP from Brownstein Hyatt Farber Schreck.
Amit Trehan (Partner) joined Freshfields from Cahill Gordon & Reindel.
Nacif Taousse (VP — Distressed & Special Situations Counsel) joined Octagon Credit Investors from Latham & Watkins LLP.
🍾Congratulations to…🍾
Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C. (Mark Duedall, Siena Berrios Gaddy, Will Curtis) for securing the legal mandate on behalf of the official committee of unsecured creditors in the NRPF Group Two, LLC chapter 11 bankruptcy cases.
FTI Consulting, Inc. ($FCN) for securing the financial advisory mandate on behalf of the official committee of unsecured creditors in the Reliz LTD dba BlockFills chapter 11 bankruptcy cases.
😢 In Memoriam😢
Damn. Two of these in a row.
Again, this is not a section we really hoped to feature regularly in this newsletter but it’s another week and another unfortunate passing. We learned last week that Judge John T. Dorsey in Delaware passed away. We’d like to extend our condolences to his family, his former colleagues and friends, and to all of those who knew him in the Delaware Bar and beyond.