Gawker Media filed for bankruptcy protection due to the $140 million verdict to Hulk Hogan after they published a video of him having sex with his best friend’s wife.
I saw people celebrating the bankruptcy news, but this action allows Gawker to delay any payment to Hogan. The bankruptcy also allows the company “to continue operating and paying its staff” with a $22 million loan.
The Chapter 11 bankruptcy claim actually puts Gawker under federal protection so they can reorganize and pay their debts:
Under Chapter 11, a debtor can restructure its finances through a plan of reorganization approved by the bankruptcy court. By reducing obligations and modifying payment terms, a Chapter 11 plan can help a debtor balance its income and expenses, regain profitability, and continue in operation. Under Chapter 11, a debtor also can sell some or all of its assets so it can downsize its business if necessary or pay down claims that it owes.
The company “listed estimated assets of $50 million to $100 million and liabilities of $100 million to $500 million.”
Gawker includes Deadspin and Jezebel.
At the trial, documents told the jury that Gawker “was valued at $83 million and that Mr. [CEO Nick] Denton was personally worth $121 million.” They also heard the company earned “$48.7 million in revenue” in 2015, but “an earlier financial disclosure, the company turned an operating profit of $6.5 million on revenue of $44.3 million in 2014.”
The papers show Hogan as the biggest creditor, but it also includes law firm Morrison Cohen, insurance brokerage Risk Strategies, Google, and content distribution firm SimpleReach.
In fact, the company now faces an auction, which will start at $90 million from Ziff Davis LLC:
In a memo to staff, Ziff Davis chief executive Vivek Shah said the auction will likely take place at the end of July and that he expected the bankruptcy court to set a schedule to take other bids soon.“There’s a tremendous fit between the two organizations, from brands to audience to monetization. We look forward to the possibility of adding these great brands—and the talented people who support them—to the Ziff Davis family,” he said.
Ziff Davis publishes “tech, gaming and men’s lifestyle websites” including Geek.com and AskMen.com.
The filing comes only a few weeks after the media reported Silicon Valley billionaire Peter Thiel helped fund Hogan’s lawsuit against Gawker. Denton called it a vendetta since Gawker outed Thiel as gay ten years ago.
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