Gawker founder Nick Denton appears headed for personal bankruptcy after a bankruptcy judge on Tuesday refused to stop Hulk Hogan’s collection pursuits.
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Gawker, a US internet publisher, filed for Chapter 11 bankruptcy protection in June after Hogan won a $140 million judgment against the company over the publication of excerpts from a sex tape, $125 million of which Denton is liable for, according to court filings.
According to the New York Daily News, Denton testified in the hearing today that the financial strain “would not only wipe him out financially, but distract him from the company’s day-to-day operations”.
As of now, Denton is personally responsible for $10 million of the $140 million payout due to Terry “Hulk Hogan” Bollea, who sued Gawker for publishing a sex tape. The Gawker Media founder has called on the billionaire Silicon Valley entrepreneur to take part in “an open and public debate” following Thiel’s admission that he is funding lawsuits.
‘In the end, the Facebook board member will have nothing to show for his petty grudge other than legal expenses and a reputation for thin skin’.
In conjunction with Gawker’s bankruptcy, Denton’s company brought an adversary case against its legal foes and warned that if Hogan was allowed to pursue Denton, it would distract from the planned sale of Gawker.
Gawker and its investment bankers are now soliciting acquisition offers for the company. Before the judge’s decision, Denton’s lawyers argued that the British journalist should be shielded from other lawsuits and protected from liabilities while Gawker is undergoing the bankruptcy process because dealing with his personal bankruptcy would be a distraction, The Guardian reports. ‘I’m the founder of the company.
Denton said that he is now refocusing on the sale of Gawker and “maintaining the value of the business”. I know where all the bodies are buried’.
Hogan’s attorney stated in court papers that the loan was for $200,000.
Denton has two assets that could be at risk if he does not file for bankruptcy: his 30 percent stake in Gawker and equity in his apartment.
Denton is leading the effort to find a buyer, Gawker’s president and general counsel, Heather Dietrick, told the court.
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