By MICHELLE MARCHANTE
After a Florida appeals court denied Gawker’s founder Nick Denton’s emergency stay request that would delay former wrestler Hulk Hogan’s ability to collect his $140 million compensation, Denton has filed for personal bankruptcy.
Hogan took Denton and A.J. Daulerio, a former Gawker editor, to court March 2015 for a sue he placed on them in 2012 when they released a vide of Hogan having sex with the wife of one of his friends. Hogan claimed that it was an invasion of privacy and won the case, being awarded $115m in damages and $25m more in “punitive damages.”
By filing for bankruptcy under Chapter 11, Gawker will be able to continue its regular day to day operations, as stated by the U.S. Securities and Exchange Commission, but will be unable to make any “significant decisions” without approval by the bankruptcy court.
This type of bankruptcy claim will also freeze any claims from any collectors, including Hogan while the company is also given the chance to “reorganize” and become profitable again.
Denton has also filed for personal bankruptcy, thereby protecting him from debt collectors and Hogan.
According to the New York Daily News, Denton’s assets range from $10 to $50 million and his liabilities are from $100 to $500 million. Besides the $125 million that he owes Hogan, his other debts include a $50,000 loan he took from his 401(k) at Gawker, his Time Warner Cable bill of $120.88 and an $11.5 million loan that he took out from the Silicon Valley Bank on June 10, but as of Monday, these debts have become frozen.
Monday Morning, Denton took to Twitter to say that Gawker and its workers will “thrive under new ownership” and that while it’s not a great day for him, he’s happy that his workers will be “freed from this tech billionaire’s vendetta.”
The billionaire Denton is most likely referring to is PayPal co-founder, Peter Thiel, who secretly funded Hogan’s legal costs as part of his attempts, according to Denton, to close down Gawker and get revenge on him after his site revealed that Thiel was gay in 2007.
“As I’ve said, Peter Thiel’s vendetta against my company may well require me as well as the company to file for bankruptcy protection until the Florida appeals court can rule on the extraordinary $140 million judgment,” Denton said during an interview with The Hollywood Reporter.
“I’m focused now on the sale process which will conclude in a month, and maintaining the value of the business. This story will conclude with Gawker Media’s popular brands sheltered under new ownership and the importance of a free and critical press reaffirmed by the courts,” he said. “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.”
During an interview with The New York Times, Thiel explained that his secret involvement in paying for Hogan’s legal battle against Denton wasn’t for revenge but for “specific deterrence,” as Gawker’s articles were “very painful and paralyzing for people who were targeted,” and that he thought it was something “worth fighting back.”
“I saw Gawker pioneer a unique and incredibly damaging way of getting attention by bullying people even when there was no connection with the public interest,” Thiel said.
The lower court’s ruling to pay Hogan immediately came after the judge, Pamela Campbell, accused Denton of misleading the court on how much Gawker’s stock was actually worth when he offered to use it as collateral instead of getting an expensive bond. According to the New York Daily News, Denton claimed his stock was worth $81 million more than enough to cover his $50 million bond but didn’t mention that Gawker was going to file for bankruptcy and that its potential buyer saw the stock to be worth $30 million.
Hogan will most likely follow Gawker into federal bankruptcy court and while the Florida appellate court rejected the emergency stay Denton requested, he can proceed with the appeal but not as fast as he wanted.
Daulerio is also expected to file for bankruptcy.
Michelle Marchante is a guest contributor at The Buzz Insider and the Assistant Opinion Director at FIUSM. She is a writer, reader and filmmaking enthusiast. Currently, she is studying to get her degree in Broadcast Journalism and is also working on her second novel. Connect with her on Twitter @TweetMichelleM
Image retrieved from Flickr.