Hulk Hogan’s lawsuit against Gawker has spun from celebrity gossip to argument over free speech as it was revealed tech billionaire Peter Thiel had been funding Hogan in secret. And Gawker may have just waved a white flag, to some degree, as the company has declared Chapter 11 bankruptcy.
All this started when Hogan took Gawker to court over posting a sex tape of Hogan and another man’s wife, although Hogan was really concerned about some racist statements he made on the tape being released, which they later were. What seemed to be little more than a sideshow for all involved quickly spun out of control, as the FBI became involved, Hogan’s legal team was allowed access to Gawker’s emails about the tape, and ultimately ended with Hogan winning a staggering $140 million judgement at trial.
Gawker has admitted it does not have $140 million on hand to pay, and it appears to be dealing with that by filing for Chapter 11 bankruptcy protection. This doesn’t mean Gawker will be selling off Jezebel and Deadspin to the highest bidder, however. Chapter 11 bankruptcy allows Gawker to operate as a “debtor in possession,” meaning its operations will be overseen and approved by a bankruptcy court. The most notable protection here is that it grants an automatic stay on any civil legal proceedings against the company, which more or less puts an end to Thiel’s strategy of backing lawsuits against Gawker, for now.
That said, Gawker doesn’t get to avoid Hogan, or Thiel, forever. The company will need to submit a reorganization plan to the court, which will need to be approved, and the Hogan judgement hasn’t gone away either. This legal saga has a few more chapters to be written yet.
UPDATE: Recode and others are reporting that a sale of Gawker Media is in the works, to Ziff Davis specifically. The company’s CEO, Vivek Shah, addressed the rumors in a memo.
I wanted to share some news about a potential acquisition for Ziff Davis. Earlier today, Gawker Media Group (GMG) filed for Chapter 11 bankruptcy. As part of that process, GMG plans to sell its media properties Gizmodo, Lifehacker, Kotaku, Jalopnik, Deadspin, Jezebel and Gawker.
Ziff Davis has entered into an asset purchase agreement to acquire all of these properties (free of GMG’s liabilities), subject to the outcome of a Court-supervised auction. Under the Chapter 11 process, the Bankruptcy Court will soon set a schedule for other potential bidders to enter the sale process. There will then be an auction, which will likely take place at the end of July.
In the event we become the acquirer, the additions of Gizmodo, Lifehacker and Kotaku would fortify our position in consumer tech and gaming. With the addition of Jalopnik, Deadspin and Jezebel, we would broaden our position as a lifestyle publisher. Much like us, GMG is heavily active in driving commerce-based revenues and has an impressive publishing and commerce platform with Kinja.
As you can see, 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.
(via CNBC)