Gawker files for bankruptcy

Gawker Media filed for bankruptcy today, according to documents filed in a Southern District of New York court.

The filing comes as Gawker’s legal battle with the wrestler Hulk Hogan (real name Terry Bollea) drags on. Hogan sued Gawker after the site published a clip of his sex tape and a blog post analyzing it; his lawsuit, as well as others against Gawker, have been funded by investor Peter Thiel, whose backing was only revealed recently.

A jury awarded Hogan $140 million in March, a decision Gawker is appealing.

Gawker asked the judge in the Hogan case to allow the appeal to progress before forcing the company to pay up, but the judge denied the request today, Politico reports. The judge’s ruling likely prompted the bankruptcy filing.

Gawker Media’s Chapter 11 bankruptcy filing says that the company’s assets are worth $50 to $100 million and that it faces liabilities (including the payout to Hogan) of $100 to $500 million.

The bankruptcy proceeding means the media company, which owns the publishing platform Kinja and runs the Gawker, Jezebel, Deadspin and other sites, will be auctioned. Gawker Media planned to sell a minority stake to Columbus Nova Technology Partners in January, in an effort to secure funding for its legal fight.

Gawker Media already has an interested buyer — publisher Ziff Davis, which runs PC Mag, reached an agreement to acquire the company, though other bids are expected through the bankruptcy process.

“Ziff Davis has entered into an asset purchase agreement to acquire all of these properties (free of GMG’s liabilities), subject to the outcome of a Court-supervised auction. Under the Chapter 11 process, the Bankruptcy Court will soon set a schedule for other potential bidders to enter the sale process. There will then be an auction, which will likely take place at the end of July,” Ziff Davis CEO Vivek Shah wrote in a memo acquired by Recode.

In a press release about the purchase agreement, Gawker founder Nick Denton said, “We have been forced by this litigation to give up our longstanding independence, but our writers remain committed to telling the true stories that underpin credibility with our millions of readers. With stronger backing and disentangled from litigation, they can perform their vital work on more platforms and in different forms.”

Disclosure: This writer formerly worked for A.J. Daulerio at the news site Ratter. Daulerio is the author of the Gawker post on Hogan’s sex tape, and he was also found personally liable in the lawsuit.

Anthony Ha contributed to this post.