After a $140 million court judgment against it in a lawsuit brought by former professional wrestler Hulk Hogan over a sex tape, Gawker Media LLC, an online publishing pioneer, filed for Chapter 11 bankruptcy and put itself up for sale.
There were revelations that billionaire investor Peter Thiel, an early backer of Facebook and a co-founder of PayPal, was bankrolling Hogan's lawsuit, along with several others against Gawker and the move followed the revelations.
Alarm bells were raised in U.S. media circles over the prospect of wealthy individuals using the courts to muzzle the press over Thiel's involvement, which stemmed from his ire over Gawker's writings about him and his friends in Silicon Valley.
During the bankruptcy process, Gawker vowed to continue operating its seven websites. In a court-supervised auction likely to take place at the end of July, Media company Ziff Davis LLC has entered an agreement to buy Gawker's assets for a little less than $100 million. However sources said that it was only the initial bid.
"Even with his billions, Thiel will not silence our writers. Our sites will thrive — under new ownership — and we'll win in court," Gawker founder and Chief Executive Nick Denton said on Twitter.
A one minute, 41-second edited video clip featuring Hogan having sex with the wife of his then-best friend, the radio shock jock Bubba the Love Sponge Clem was published by the websites and which Hogan's lawsuit that accused Gawker, Denton and former Gawker editor A.J. Daulerio, claimed violated his privacy.
$60 million for emotional distress and $55 million for economic damages were awarded to Hogan, 62, in March by a six-person jury. Another $25 million in punitive damages was then added by the jury.
Legal experts believe the company has a good chance of eventually having the award thrown out or reduced as Gawker has vowed to appeal the verdict. It had just $5.3 million in cash on hand and faced massive legal bills, Gawker said at a post-trial hearing in St. Petersburg, Florida.
The defendants were to put up their shares of the company as collateral to be held by Hogan's lawyers even as the judge agreed to postpone payment of the $140 million judgment while Gawker pursued its appeal.
Hogan was also included in the arrangement for holding of collateral to which Gawker but their objection was rejected by the judge. Gawker asked the judge to extend the bankruptcy court protections to Denton, Daulerio and other former and current Gawker employees in a separate lawsuit in bankruptcy court that was filed by the company.
If the lawsuits against him personally are allowed to proceed Denton could be forced to file for personal bankruptcy, the lawsuit states. According to the lawsuit, Denton owns about 30 percent of Gawker. The company has grown at a compound annual rate of 24 percent over the past 3 years and posted revenues of $49.9 million in 2015, according to the documents.
Developing a direct, conversational and sometimes-slashing style that dispensed with many journalistic conventions and was widely imitated, Gawker and Denton were influential forces in the development of online media. it was also one of the few early digital publishers to build a profitable independent business even though its eagerness to dish salacious gossip was often condemned.
Gawker Media also publishes consumer websites Gizmodo, Lifehacker, Kotaku, Jalopnik, Deadspin and Jezebel apart from its flagship Gawker site.
(Source:www.reuters.com)
There were revelations that billionaire investor Peter Thiel, an early backer of Facebook and a co-founder of PayPal, was bankrolling Hogan's lawsuit, along with several others against Gawker and the move followed the revelations.
Alarm bells were raised in U.S. media circles over the prospect of wealthy individuals using the courts to muzzle the press over Thiel's involvement, which stemmed from his ire over Gawker's writings about him and his friends in Silicon Valley.
During the bankruptcy process, Gawker vowed to continue operating its seven websites. In a court-supervised auction likely to take place at the end of July, Media company Ziff Davis LLC has entered an agreement to buy Gawker's assets for a little less than $100 million. However sources said that it was only the initial bid.
"Even with his billions, Thiel will not silence our writers. Our sites will thrive — under new ownership — and we'll win in court," Gawker founder and Chief Executive Nick Denton said on Twitter.
A one minute, 41-second edited video clip featuring Hogan having sex with the wife of his then-best friend, the radio shock jock Bubba the Love Sponge Clem was published by the websites and which Hogan's lawsuit that accused Gawker, Denton and former Gawker editor A.J. Daulerio, claimed violated his privacy.
$60 million for emotional distress and $55 million for economic damages were awarded to Hogan, 62, in March by a six-person jury. Another $25 million in punitive damages was then added by the jury.
Legal experts believe the company has a good chance of eventually having the award thrown out or reduced as Gawker has vowed to appeal the verdict. It had just $5.3 million in cash on hand and faced massive legal bills, Gawker said at a post-trial hearing in St. Petersburg, Florida.
The defendants were to put up their shares of the company as collateral to be held by Hogan's lawyers even as the judge agreed to postpone payment of the $140 million judgment while Gawker pursued its appeal.
Hogan was also included in the arrangement for holding of collateral to which Gawker but their objection was rejected by the judge. Gawker asked the judge to extend the bankruptcy court protections to Denton, Daulerio and other former and current Gawker employees in a separate lawsuit in bankruptcy court that was filed by the company.
If the lawsuits against him personally are allowed to proceed Denton could be forced to file for personal bankruptcy, the lawsuit states. According to the lawsuit, Denton owns about 30 percent of Gawker. The company has grown at a compound annual rate of 24 percent over the past 3 years and posted revenues of $49.9 million in 2015, according to the documents.
Developing a direct, conversational and sometimes-slashing style that dispensed with many journalistic conventions and was widely imitated, Gawker and Denton were influential forces in the development of online media. it was also one of the few early digital publishers to build a profitable independent business even though its eagerness to dish salacious gossip was often condemned.
Gawker Media also publishes consumer websites Gizmodo, Lifehacker, Kotaku, Jalopnik, Deadspin and Jezebel apart from its flagship Gawker site.
(Source:www.reuters.com)