July 18, 2016

Lawsuits Push Gawker’s Nick Denton to Brink of Bankruptcy

The Wall Street Journal

By Tom Corrigan (July 12, 2016)

Lawyers for Gawker Media LLC say founder and Chief Executive Nick Denton will join his media company in bankruptcy unless a judge steps in to block litigation from former professional wrestler Hulk Hogan and his billionaire backer.

In court papers filed Monday in U.S. Bankruptcy Court in Manhattan, Gawker’s lawyers said the personal bankruptcy filing “would undoubtedly occur” if a judge rejects Gawker’s bid for an injunction that would halt legal action from Terry Bollea, the wrestler’s real name, as well as others who have sued the embattled publisher….

Forcing Mr. Denton into bankruptcy would represent a victory for Mr. Bollea and could open up a new window into the Gawker founder’s personal finances.

“Nick Denton probably doesn’t want to have to say that Hulk Hogan bankrupted him,” said Michael Fay, a bankruptcy lawyer with Berg & Androphy who is not involved in the case. “If Nick Denton does file for bankruptcy, most of his personal finances, how he’s been paid, what he’s been paid, all becomes public.”

Gawker filed for bankruptcy June 10, and has since won bankruptcy court approval to sell off its most valuable assets. The snarky online publisher has lined up a $90 million opening bid from publisher Ziff Davis LLC, which will be tested at an auction next month. Court papers show the company is currently marketing itself to at least 55 potential bidders.

Gawker has asked Judge Stuart Bernstein, the judge overseeing its chapter 11 case, to shield not only Mr. Denton but also Executive Editor John Cook, former Gawker.com Editor in Chief A.J. Daulerio and several current and former writers, all of whom are subjects of pending litigation related to Gawker articles.

Judges, however, are often reticent to extend chapter 11 protections to individuals not in
bankruptcy, according to Mr. Fay….

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