Gawker Asks Bankruptcy Court To Halt Hulk Hogan’s Privacy Suit

Associated Press

UPDATED with WGA East statement below: Just after filing for Chapter 11 bankruptcy protection today, Gawker Media asked a U.S. Bankruptcy Court to stop several lawsuits against it, including wrestler Hulk Hogan’s violation of privacy action. A jury awarded him $140.1 million, finding that a video Gawker posted showing him engaged in an extramarital affair was not newsworthy.

If the cases against Gawker and founder Nick Denton proceed then they could “significantly interfere with” Gawker Media’s “efforts to reorganize” or sell itself to “preserve value for distribution to creditors,” according to the complaint.

Gawker says a buyer might insist on being indemnified against losses from the suits, reducing funds available to creditors.

In addition, the suits “have a chilling effect on [Gawker’s] employees and, as a result, on [its] ability to continue to generate revenue on an ongoing basis.” They also are “a significant burden and distraction” for key personnel including Denton — who might also face “a consequent personal bankruptcy.”

If that happened, then Denton “would be unable to spearhead [Gawker’s] day-to-day operations, maintain [its] value as a going concern, liaison with [its] professionals, and most importantly, execute a value-maximizing sale.”


Any harm to Hogan and other plaintiffs “is vastly outweighed by the harm suffered by [Gawker] in the absence of an injunction.” And if Denton filed for personal bankruptcy protection, then the court would deal with “the same creditors disputing the same issues in the same forum — but in two separate cases” resulting in “tremendous inefficiency.”

The filing says that Gawker Media generated $49.9 million in revenue last year, and since 2012 grew at an average rate of 24% a year.

Denton founded it in 2002 and due to his “vision and forward thinking,” it says, helped it to achieve “its globally recognized status.”

“It is Mr. Denton’s commitment to free press that has propelled his Company — once described as a ‘stenographer for celebrities’ — into a place where honest news and commentary thrive, reporting on current events, politics (especially prescient in an election year), popular culture, sports, women’s issues, and technology,” the filing says. “Mr. Denton is uniquely suited to have the overarching role of imparting his vision on the Debtor’s business and directing the forward path of his company.”

The WGA East, which recently began representing Gawker’s staff — the first digital media company is has pacted with — said in a statement today: ““The Writers Guild of America, East represents the editorial employees of Gawker Media, which filed for protection under Chapter 11 today. Our members create the content that brings millions of unique visitors to Gawker’s sites and they are eager to keep doing that work under the terms we negotiated. We look forward to continuing our positive, productive relationship with Gawker and we are confident the company will emerge from the bankruptcy proceedings stronger than ever.”


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