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Hulk Hogan case sends Gawker into bankruptcy, forces sale of company

Terry Bollea, aka Hulk Hogan, Testifies In Gawker Media Lawsuit Photo by John Pendygraft-Pool/Getty Images

Faced with a huge debt in the form of $140 million dollar ruling against them in their legal battle with Hulk Hogan over the release of a 2012 sex-tape, Gawker Media Group (GMG) today filed for Chapter 11 Bankruptcy and began the process of selling the company.

The ruling in the Hogan lawsuit is still under appeal, and Gawker is positioning today’s move as a way to continue the appeals process and operate their websites simultaneously. Hogan (real name Terry Bollea) is listed at GMG’s top creditor in their bankruptcy filing, and the court restructuring of their debt will still include a large payment to the WWE Hall of Famer unless Gawker wins their appeals.

They also announced an “asset purchase agreement” with Ziff Davis, another publisher. It’s believed the Ziff Davis bid is for less than $100 million dollars, and represents a floor other potential buyers can attempt to top during the bankruptcy auction of the company.

It’s unlikely any organization or individual would finalize the purchase of GMG until their legal battle with Hogan is concluded, either by winning or exhausting appeals.

The case has been positioned by Gawker owner Nick Denton and others as a freedom of the press issue since it came to light that Hogan’s lawsuit was funded by Silicon Valley investor Peter Thiel, in part because a GMG site outing him as a homosexual in 2007.

The company’s statement on the filing includes:

The sale and filing are intended to preserve the value of GMG's pioneering digital news business, safeguard the jobs of journalists and other staff, and allow GMG to fund the appeal against the $130 million judgment in the Hulk Hogan case. Gawker Media Group is putting its properties up for sale after a coordinated barrage of lawsuits intended to put the company out of business and deter its writers from offering critical coverage.

Hogan, amidst a few reTweets of fans praising him for taking down "another Giant”, offered this: