In re Vice Group Holding Inc.

Vice Group Holding Inc., Vice Media, LLC, and other related entities (collectively, Vice Media) (debtors) declared bankruptcy. Vice Media had a contract with Showtime Networks, Inc. (Showtime) to “produce, deliver, and license” a weekly newsmagazine television series called the “Vice Series” to Showtime for eight seasons. Personnel at Vice Media had won two Emmys prior to entering into the contract, and the contract stated that the show’s having “first-class technical quality” was “of the essence.” The contract did not specify any particular individuals who had to work on the show. However, the contract gave Showtime approval rights over creative elements and key personnel, such as talent, the showrunner, the director, and executive producers. The contract also gave Showtime takeover rights if the previously approved director became incapacitated. Finally, the contract had an option for Showtime to order additional seasons. At the time of the bankruptcy proceedings, the show was in its fourth season, leaving four seasons still pending under the contract. Three of Vice Media’s creditors formed a new entity to purchase Vice Media as a going concern. The creditors represented to the bankruptcy court that this new entity intended to retain Vice Media’s current management and key employees. Vice Media moved for permission to assume the remainder of the Showtime contract and to assign the contract to the new entity as part of the sale. Showtime objected, arguing that the contract could not be assigned because it was for personal services. Vice Media argued that the contract could be assigned because it was not for personal services but rather for a product—the completed show episodes. The bankruptcy court considered the motion.