News and gossip website Gawker Media has filed papers in the United States for Chapter 11 bankruptcy protection after the company lost $140 million (£100m) in a lawsuit involving wrestler Hulk Hogan.
Mr. Hogan, real name Terry Bollea, was awarded $115 million (plus legal costs) after a jury ruled in his favour during an invasion of privacy lawsuit against Gawker Media in March of this year. The jury, which was made up of two men and four women, deliberated for six hours before delivering their verdict at a court in St. Petersburg, Florida, USA. It was widely reported that Hogan broke down in tears after hearing the jury’s verdict.
Bankruptcy protection allows for a business to restructure debts, meaning it could potentially not have to pay Mr. Hogan damages. Gawker has informed its staff that an appeal has been filed against the ruling and that it would continue to operate as normal, although bids are being taken from other media organisations.
One potential buyer is Ziff Davis, the owner of Geek.com and PC Magazine. An offer has reportedly been made for under $100 million for all of Gawker’s assets – including brands Jezebel, Lifehacker, and Kotaku, amongst others. Gawker claims the reason for the sale is a due to a “barrage of lawsuits intended to put the company out of business and deter its writers from offering critical coverage.”
After hearing the news, employees from the Gawker company Recode said: “It was like when your mom pretends the marriage is okay to protect you or whatever. Everyone is doing [grimace emoji face] via text.”
Gawker CEO Nick Denton with media president Heather Dietrick told employees that the company “intended to win an appeal in the Hulk Hogan case.” Last month, it was disclosed that billionaire and PayPal founder Peter Thiel was backing Hogan’s lawsuits. Nick Denton has had a “personal hunch” that the monetary backing could be linked to someone in the technology industry.
“If you’re a billionaire and you don’t like the coverage of you, and you don’t particularly want to embroil yourself any further in a public scandal, it’s a pretty smart, rational thing to fund other legal cases,” Denton told The Times.
Last year Mr. Denton valued Gawker Media at $300m, including all brand names owned by the network.