Gawker Media filed for bankruptcy protection Friday after being slammed with a $140 million judgment for releasing a Hulk Hogan sex tape in a case bankrolled by a Silicon Valley billionaire.
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The digital media company listed a $130 million claim from the litigation as “disputed” in its Chapter 11 petition, filed Friday in Manhattan.
A massive chunk of those liabilities rests in a punishment levied on the company for making public a video in which professional wrestler Hulk Hogan was seen having sex with a woman who was married to a man who has been called Hogan’s best friend. The jury then added another US$25 million in punitive damages.
Gawker has proceeded with plans to auction its property, according to reports from the New York Times and Wall Street Journal.
Gawker filed a separate lawsuit in bankruptcy court on Friday asking the judge to extend the bankruptcy court protections to Denton, Daulerio and other former and current Gawker employees. Ziff Davis has not decided on what it would do with Gawker.com if it buys the company, the person said.
Thiel, a co-founder of PayPal, confirmed last month that he has funded Hogan’s lawsuit against Gawker along with others as a measure of “deterrence”. Many didn’t see why the company would publish such a story about someone, and Gawker founder Nick Denton chose to have the story removed. Another Gawker site, Valleywag, ran a number of stories skewering Facebook, which provided a big chunk of Thiel’s estimated $2.7 billion fortune. “While many of us disagreed with Gawker’s news judgment in this case, and many are ambivalent about Gawker itself, the issue here was a billionaire’s use and potential abuse of the legal process to drain a journalism outlet’s resources”.
The wrestler whose real name is Terry Bollea filed suit against Gawker after a post in October 2012 about the wonders of watching celebrity sex.
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Along with its flagship Gawker site, Gawker Media also publishes consumer websites Gizmodo, Lifehacker, Kotaku, Jalopnik, Deadspin and Jezebel. One of his lawyers, David Houston, said in a statement that the wrestler and his legal team intend to pursue the judgment award and hold Gawker “accountable”.
