Gawker Media Group, the parent of the news and gossip site Gawker, filed for Chapter 11 bankruptcy protection Friday and put itself up for sale, in moves designed to shield its assets after it lost a $140.1 million privacy-invasion lawsuit to professional wrestler Hulk Hogan in March.
Gawker has appealed the judgement against the company, its chief executive Nick Denton and its former editor, A.J. Daulerio, and had asked that it be reduced or stayed while its appeal is pending.
But on Friday, the judge in the case, Pamela Campbell, denied Gawker’s request for a stay, triggering Gawker’s bankruptcy-protection filing and plans to auction itself. It has no plans to cease operations while it appeals.
Gawker Media, which also owns the sports website Deadspin and the tech blog Gizmodo, has not commented on the filing.
Gawker had begun taking bids for the company, founded in 2002 by Nick Denton, a former staffer for the Financial Times, according to people at the company. These sources said an opening bid came from Ziff Davis, a digital media company that has offered $90 million to $100 million.
Like all publishers, Ziff Davis, perhaps best known as the publisher of PC magazine, has been hurt by the decline in print advertising, and has attempted to recast itself on the web through such sites as AskMen.com, Computer Shopper and ExtremeTech.
“We are encouraged by the agreement with Ziff Davis, one of the most rigorously managed and profitable companies in digital media,” Denton said in a statement. “A combination would marry Ziff Davis’ strength in e-commerce, licensing and video with [Gawker Media’s] premium media brands.”
However, Ziff Davis’s bid isn’t final. Under a court-supervised auction, Gawker would be free to accept higher offers. In January, in an effort to defray some of the cost of its litigation, Denton sold a minority share of the company to Columbus Nova Technology Partners.
A Chapter 11 filing, which must be approved by a bankruptcy court, protects a company’s assets from creditors and enables it to reorganize its finances under the court’s supervision. Many companies, including General Motors, have survived after filing under Chapter 11 of the bankruptcy code.
Hogan, whose real name is Terry Bollea, sued Gawker in 2012 after it posted excerpts of a sex tape featuring him and the wife of a friend, Heather Cole. After a two-week trial, a Tampa jury awarded Hogan a total of $140 million in general and punitive damages.
The dispute took on a new coloration last month when billionaire technology investor Peter Thiel — a target of Gawker stories — revealed he had bankrolled Hogan’s suit. The revelation suggested Thiel was intent on financially crippling the company as payback for its reporting on him.
Thiel, a co-founder of PayPal and a Facebook board member, has long been upset with the site’s coverage of him, particularly a 2007 story by a now-defunct Gawker-owned site that disclosed he is gay.
Thiel said he has spent as much as $10 million to secretly support Hogan’s lawsuit. In an interview with The New York Times, he said Gawker published articles that were “very painful and paralyzing for people who were targeted,” adding, “I thought it was worth fighting back.”