Gawker Media (Digital Media Group) filed for Chapter 11 bankruptcy after losing a $140 million case. Gawker Media filed for bankruptcy after a Florida judge upheld a $140 million judgment against the company. The company is on sale after declaring bankruptcy and an auction will be held to sell the company.
The filing is the result of the Hulk Hogan privacy violation case. Back in 2012, when Gawker posted a video of Hogan having sex with the wife of a former best friend; Hogan filed a lawsuit against the company. The court decided in the favor of Hogan and against Gawker Media earlier this year. Gawker media appealed for a stay but was denied by a Florida judge this month. This resulted in Gawker filing for bankruptcy.
The company declared in court that it has assets of around $50 to $100 million and liabilities (including the liability to Hulk Hogan) of around $100 to $500 million. According to a person close to the matter, Gawker Media is not earning a profit since Hulk Hogan filed a lawsuit against the company because all the profit is reimbursed for the costs of the filing. He also added that it might be possible that company does not earn any profit this year too.
The company is going to sell all of its assets including six other digital media sites it owns. The selling will be through auction, and the company has already received an opening bid of around $90 million by Ziff Davis LLC. The bid will increase as more buyers start showing interest in buying the online media group.
This filing is a major blow for the company which was a pioneer in digital media when Nick Denton launched it in 2003. Gawker media has recently been in many controversies which adversely affected the company’s operations. Two years back, the company earned $48.7 million in profits but right after the Hulk Hogan case; the company is in deep financial trouble as the costs for the trials skyrocketed.
Last month, it was revealed that all cases against Gawker Media are backed up financially by a Silicon Valley billionaire Peter Thiel. Peter Thiel is seeking revenge from the company for outing him as gay in 2007. The post which outed Peter Thiel appeared on ValleyWag blog, which was then owned by Gawker Media.
Here’s a closer look what Mr. Denton had to say after the filing:
“Gawker Media Group is putting its properties up for sale after a coordinated barrage of lawsuits intended to put the company out of business and deter its writers from offering critical coverage,” said Mr. Denton in a statement.
“Even with his billions, Thiel will not silence our writers. Our sites will thrive—under new ownership—and we’ll win in court.” said on twitter post.
Photo by MikeKalasnik
Photo by MikeKalasnik