The recently shuttered Mode Media is working with Silicon Valley’s Sherwood Partners, which helps businesses in restructuring, liquidating and bankruptcy, WWD has learned. It is not yet clear whether Mode will file for bankruptcy.
Last Thursday, Mode Media’s 300 or more employees were unexpectedly informed that the company would be closing its doors effective immediately. In a document shared with employees, Mode Media stated that in the past five months the company had “actively and continuously been seeking financing or a business combination that would have avoided the action we are taking today. Had we notified you earlier of the possibility that those efforts were taking place and might not be successful, we believed the potential financing sources and acquires would be unwilling to provide any financing or engage in any transaction.”
Employees reportedly were not paid severance and many of the freelancer writers and bloggers who contributed content to Mode are saying that they are still owed money; some saying it’s in the thousands of dollars.
When reached, a Sherwood representative said that the company had not yet released a statement, and that due to “the severity of the situation” and the unexpected nature of the closure, a statement was expected later this week.
According to members of a support group formed by former employees and writers, Sherwood managing director Michael Hogan, whose expertise is in stabilizing underperforming businesses and in “creating exits,” is said to be working on the account. A former employee said that on Friday after the news was revealed and employees were returning computers to Mode’s Brisbane, Calif., offices, reporters were trying to push their way into the office and Mode executives were unwilling to discuss the matter.
Mode Media, formerly Glam Media, was a digital media company that provided native content, branded video and digital advertising, and worked with bloggers to provide content that was curated by in-house editors. It reached a $1 billion valuation and raised as much as $224 million, with revenues reportedly at $100 million. It tried, but abandoned, plans for an initial public offering in 2013. A representative of Mode Media could not be reached for comment.