Quantcast
Channel: Daily Bankrupt Company Updates | Bankrupt Company News
Viewing all articles
Browse latest Browse all 4593

Gawker Media Chapter 11 Petition Filed

0
0

 

Privately-held Gawker Media and Gawker Media Group filed for Chapter 11 protection with the U.S. Bankruptcy Court in Manhattan and is represented by Gregg M. Galardi of Ropes & Gray.

Gawker Media Group’s recently-appointed chief restructuring officer, William D. Holden (a managing director with Opportune LLP), notes, “Historically, the Company’s financial health was good; it survived the 2008-2009 recession and was profitable from 2010 until 2015. However, despite its longrunning success and commendable growth trajectory, the Company suffered this year from exorbitant legal expenses and a recent judgment totaling more than $130 million. While the Company feels strongly that the judgment will be overturned on appeal, it cannot post the $50 million bond required by the Florida state court to stay execution of the judgment while the appeal is pending.”

Holden further explains the cause of its Chapter 11 filing: The “Bollea Litigation and Judgment.” Perhaps the most notorious of its litigations, this arises out of Gawker.com’s October 2012 publication of an article commenting on a video depicting Terry Gene Bollea (aka Hulk Hogan) “having sexual relations with Heather Clem, the wife of his then-best friend, radio disk jockey Bubba Clem, along with brief and highly edited excerpts from the Video.” On its Chapter 11 petition, Gawker Media notes that Bollea holds the largest unsecured claim against the Company.

Following a multi-year legal battle related to this controversial content, the Florida State Court denied Gawker Media a complete, temporary stay in to pursue its appellate rights on June 10, 2016. In her ruling, Florida trial judge, Pamela A.M Campbell notified Gawker Media that she would only grant the requested stay if the Company agreed to turn over control of its bank account and business operations to Bollea. Holden notes, “[T]he trial court ruled that it would enter an order proposed by the plaintiff that would permit the plaintiff to begin the process of executing on the judgment by securing liens on Gawker Media’s property.”

Gawker Media launched a process to explore its alternatives, hiring restructuring and financial advisors. The parties promptly agreed that a quick sale “was in the best interests of the Company and its constituencies.” The Company entered into a stalking horse asset purchase agreement with ZDGM LLC (an affiliate of Ziff Davis, LLC) as buyer. Ziff Davis, a subsidiary of j2 Global, Inc., is a leading global digital-media company operating in the technology, gaming, entertainment and lifestyle verticals.

The June 10, 2016 Chapter 11 filing was initiated to provide U.S. Bankruptcy Court protection for the 363 auction and sale process. According to a story posted on Gawker.com, “The filing is not expected to affect Gawker Media’s normal editorial or business operations for the foreseeable future. However, it is the most significant change to Gawker’s corporate structure in its 14-year history.” The Company further notes, “The protection afforded by the bankruptcy filing will allow [GMGI] to exercise its rights to due process. The company is confident it will ultimately prevail in the Hogan lawsuit, but was not able today to obtain from the trial court even a brief stay without onerous conditions to seek relief from the appeals court.”

Gawker Media has arranged a $22 million debtor-in-possession financing arrangement to fund ongoing operations. Gawker Media’s Chapter 11 petition indicates total assets of $50 to $100 million.

Read more Gawker Media bankruptcy news.

The post Gawker Media Chapter 11 Petition Filed appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


Viewing all articles
Browse latest Browse all 4593

Latest Images

Trending Articles





Latest Images