Gawker filed for bankruptcy Friday and will also be putting itself up for sale to raise cash. The NY Times reports:
The company is beginning an auction, said the person, who spoke on condition of anonymity because the auction has not been announced. Ziff Davis, a digital media company, has submitted an opening bid of $90 million to $100 million, the person said.
Such an offer is known as a stalking-horse bid, meant to set a floor in a court-supervised auction.
The person said Gawker has filed for bankruptcy to protect jobs and ensure continued operations. Filing for Chapter 11 stays claims from creditors, including court judgments — meaning Gawker would not need to begin paying Hogan, whose name is Terry G. Bollea. It also allows companies more time and more control as they reorganize themselves.
Also Friday, the Florida judge who is overseeing the case agreed to postpone payments to Bollea until after an appeals court renders its decision. The Tampa Bay Times reports the judge agreed to the postponement after the defendants agreed to put up all of their stock shares as security:
In Pinellas court Friday morning, Gawker defense attorney Michael Berry said the defendants, former editor A.J. Daulerio and CEO Nick Denton, could not afford to pay the multimillion-dollar judgment, adding that it would mean “certain financial ruin” for them. Instead, he offered to pledge their stock shares: nearly 6,000 from Daulerio and about 45 million from Denton. His shares total about 30 percent of Gawker Media’s stock.
“We’re willing to pledge it all,” Berry said.
CNN is also reporting the judge agreed to the postponement sought by Gawker’s attorney. However, the NY Times seems to be saying something different. Their story reads, “The company filed for Chapter 11 bankruptcy on Friday after a judge overseeing the suit against the company entered the full judgment and denied Gawker’s request for a stay under terms the company could meet.” That makes it sound as if the postponement Gawker was seeking was not granted. It’s not clear if the Times is referring to some other terms Gawker was seeking.
Bollea won his lawsuit against Gawker in March. The suit claimed that Bollea’s privacy was violated when Gawker published an edited portion of a sex tape, including images of Bollea’s penis, that had been filmed without Bollea’s knowledge or consent. A jury awarded Bollea a total of $140 million in damages, more than he had been seeking. Gawker’s Nick Denton said at the time that he expected the judgment to be overturned on appeal.
In May, Hogan filed a new lawsuit against Gawker claiming the company had threatened him with the release of a sealed transcript. That transcript contained racist comments Bollea had made about his daughter’s boyfriend. Hogan was dumped by his wrestling company after the comments came out. He has since apologized in a tearful interview with ABC News.
One additional wrinkle in the story is the revelation that billionaire Peter Thiel has funded numerous lawsuits against Gawker, including Bollea’s lawsuits. Gawker outed Thiel as gay in 2007.