The viral content publisher Unilad is set to go into administration, putting hundreds of jobs at risk.
The website’s parent company, Bentley Harrington Ltd, has debts of £6.5m, including a £1.5m tax bill, a court heard.
Unilad co-founder Alex Partridge, who sold a majority stake in the brand in 2014, is also owed £5m and has taken legal action against the firm.
The company’s directors have agreed that administrators should be appointed, lawyers told the Insolvency and Companies Court in London on Thursday.
Bentley Harrington had initially argued against administration but have withdrawn their objections amid investor interest in its assets, judge Clive Jones was told.
Unilad was founded as a student “banter” site in 2010 and grew to become one of the most popular publishers of viral content, with than 39 million likes on Facebook.
The company has hundreds of staff and offices in Manchester, east London and New York.
The website was shut down in 2012 amid a backlash over sexist content and accusations that it trivialised rape.
It was relaunched in 2014 after Liam Harrington and Sam Bentley bought the brand.
The publisher claims its content, which feature shareable videos and viral news, is seen by more than a billion people each week.
But it has been beset by recent legal battles and internal misconduct investigations, has been forced to adapt to Facebook algorithm changes designed to promote high-quality news.
HM Revenue and Customs have issued a petition to wind up Bentley Harrington in separate litigation.
A judge is due to analyse that application on 31 October.
The Independent has asked Unilad for a comment.
