Gawker Media owes Hulk Hogan $140 million — and now the company has filed bankruptcy. The company will also be put up for auction.
The sale was triggered after the judge overseeing the invasion-of-privacy case brought by Hulk Hogan—whose real name is Terry Bollea—declined to issue a stay pending Gawker’s appeal. That required the company to put up a $50 million bond.
As a result, Gawker Media will declare bankruptcy in order to continue operating and paying its staff.
The sale comes as Gawker has come under intense legal and financial pressure stemming from the case brought by Mr. Bollea. In March, a Florida jury awarded the wrestler $140 million in damages. Gawker is appealing the ruling.
Proceeds from a sale will go into a fund to finance further litigation costs and cover whatever damages may ultimately be leveled following the appeals process, which could take years to resolve. Gawker has said that it expects to ultimately prevail.
A judge denied Gawker’s motion for a new trial and a reduction of the $140 million privacy invasion judgment awarded to wrestler Hulk Hogan in March. Gawker cited reports that billionaire investor Peter Thiel funded the lawsuit. WSJ’s Lee Hawkins explains.
Gawker will sell its business at a bankruptcy court-supervised auction. It has arranged a $22 million bankruptcy loan to stay open pending the sale. The company listed Mr. Bollea as its largest creditor with a $130 million claim.
Whatever money is left at the end of the legal process will go to Nick Denton, Gawker’s founder who owns most of the company, and other shareholders. Earlier this year, Columbus Nova Technology Partners took an undisclosed minority stake in the media company as it shored up its books for the trial.
Two weeks ago, it emerged that Silicon Valley billionaire and investor Peter Thiel has been financing Mr. Bollea’s legal fight and other such battles involving people who Mr. Thiel feels have been targeted unfairly by the media company.