Gawker files for bankruptcy

Associated Press

NEW YORK

Gawker Media is filing for Chapter 11 bankruptcy protection and putting itself up for sale, strained by a jury’s verdict that it must pay $140 million to pro wrestler Hulk Hogan in an invasion-of- privacy lawsuit.

The filing by the 14-year-old website follows the revelation in May that Silicon Valley billionaire Peter Thiel bankrolled Hogan’s lawsuit as what he called a “deterrent” to Gawker’s no-holds-barred and sometimes gonzo style of journalism. Thiel’s secret role sparked anxiety over the possibility that more wealthy individuals might cow publications by covertly funding lawsuits against them.

Gawker says it plans to sell itself to publishing company Ziff Davis, although other bidders could emerge during the bankruptcy-court auction. The sale will help it fund its appeal against the Hogan judgment in a Florida state court.

“We have been forced by this litigation to give up our long-standing independence,” Gawker founder Nick Denton said in a statement. “With stronger backing and disentangled from litigation, [Gawker writers] can perform their vital work on more platforms and in different forms.”

The move also allows Gawker’s websites to keep operating normally, the company says.

Gawker filed for Chapter 11 bankruptcy protection about three months after Hogan won a lawsuit against the online gossip and news publisher.

The New York publisher said in the filing that it has as much as $500 million in debt and up to $100 million in assets.

Hogan sued Gawker after it posted a video of him having sex with a friend’s wife. Gawker said the footage was newsworthy information about a public figure and protected by the First Amendment. Hogan still won a judgment for $115 million in compensatory damages plus an added $25.1 million in punitive damages.

Only afterward did Thiel’s part in funding Hogan’s lawsuit become clear.