ST. PETERSBURG – Gawker Media's CEO may file for bankruptcy to avoid a $140 million judgment in legal suit brought on by Hulk Hogan.
Gawker Media CEO Nick Denton may file personal bankruptcy after a New York judge ruled the media mogul cannot seek bankruptcy protection under his company Gawker. Gawker was sued along with Denton by professional wrestler Hulk Hogan over a sex tape that it published with Hogan and a friend’s wife, Heather Clem. Hogan claimed the tape violated his privacy and won a $140 judgment in the case.
Gawker filed for Chapter 11 bankruptcy in June to avoid paying the verdict, which a judge ruled offers no protection for Denton. Denton, who was named in the suit along with Albert J. Daulerio, a former editor of the company, has little choice at this moment other than personal bankruptcy to avoid the penalty named to him in the suit.
“He has this big judgment from Hulk Hogan against him for what he did personally and he’s insolvent, so he’s going to try and liquidate his personal assets, except for his personal assets like his home,” Jon Alper, attorney at Alper Law told the Florida Record. “But, at least Denton can start over. He can get into a new business and doesn’t have to worry about the judgment. He’s basically financially rebooting.”
By filing bankruptcy, Denton doesn’t have much to lose other than the judgment against him by Hulk Hogan. He will be able to maintain most of his assets by filing, allowing him to start fresh.
“Someone can be very rich in Florida and not lose anything because things like your homestead property is exempt in bankruptcy,” said Alper. “He can have a lot of assets and come through bankruptcy and keep the assets and get rid of Hulk Hogan’s liability, so that’s what he is doing. He’s rebooting, but when he reboots he may keep a lot of assets that are exempt.”
Denton is currently in the process of selling Gawker Media in a court-mediated sale. The sale is expected to go through in August with Ziff Davis as the new publisher, reportedly signing an agreement for $90 million for the sale of seven Gawker assets. Other offers are still being entertained for the media company in the near-term. The company has 250 employees and seven locations in the U.S.
Gawker and Denton have criticized Peter Thiel, which they have said has a vendetta against the company, fueling the lawsuit with Hulk Hogan by backing Clem’s husband in the suit. Thiel was outed by Gawker as being gay, which he claims ruined his life and friends of his. Gawker published several articles about the billionaire’s sexual preference, allegedly causing Thiel to create a plan to get back at the media company.
Gawker has maintained that its right to publish the sex tape was part of its First Amendment rights and that Hogan has publicly talked about his sex life in the media and in a book. Gawker has also said it is in the process of completing an appeal in the Hogan decision.