Hulk Hogan’s payout bankrupts Gawker

WRESTLING legend Hulk Hogan has dropped the ultimate body slam on Gawker — forcing the New York gossip website into bankruptcy.

Hulk Hogan won $US140 million in damages from Gawker. Picture: AP

WRESTLING legend Hulk Hogan has dropped the ultimate body slam on Gawker — forcing the New York gossip website into bankruptcy.

The New York Post reports that the Chapter 11 bankruptcy filing came just minutes after Florida Judge Pamela Campbell said Hogan could start slapping liens on Gawker’s property as part of his effort to secure his $US140 million ($188 million) jury verdict against the company.

In March, Hogan won his invasion of privacy lawsuit against Gawker for posting a sex tape online involving him and Heather Clem, the ex-wife of his best friend Bubba the Love Sponge.

Nick Denton, founder of Gawker Media, is up for $US10 million in punitive damages. Picture: Supplied

Former pro-wrestling personality Hulk Hogan. Picture: Supplied

Gawker “was forced to file a petition for relief under the Bankruptcy Code on an emergency basis, because, this morning, the debtor was denied a complete, temporary stay in Florida state court to purse” an appeal, the website’s restructuring executive William Holden says in the Manhattan federal court filing.

Because of the “emergency” Holden is asking for a temporary waiver from the legal rule that requires Gawker to file sworn statements detailing its business, expenses, creditors and assets.

Initial bankruptcy filings show that the website has between 200 and 1000 creditors, $US50 million to $US100 million in assets, and $US100 million to $US500 million in liabilities.

The legal papers also detail Gawker’s downfall.

“Historically, the company’s financial health was good; it survived the 2008-2009 recession and was profitable from 2010 until 2015,” Holden writes in court papers.

Terry Bollea, aka Hulk Hogan, testifies in court during his trial against Gawker Media. Picture: Getty

Nick Denton, founder of Gawker, talks with his legal team before Terry Bollea, aka Hulk Hogan, testifies in court. Picture: Getty

“However, despite its long running success and commendable growth trajectory, Gawker Media suffered this year from exorbitant legal expenses and the recent judgment totalling more than $US130 million,” he says.

The company will use two loans, one $US15 million advance made by Menlo Park, California venture capital firm US VC Partners, and another $US7.6 million credit from Silicon Valley Bank, to stay afloat during the proceeding.

Meanwhile Gawker plans to start “the process of marketing and selling assets of the company,” according to the bankruptcy filing.

Hulk Hogan performs at Rod Laver Arena. Picture: Supplied

Ziff Davis, owner of PC Mag, has already put in a bid for between $US90 million and $US100 million to buy Gawker, according to a source.

Proceeds from any sale of Gawker would be put into escrow pending the site’s appeal of the Hogan verdict, the source said.

If Gawker wins the appeal it will recoup the sale money, otherwise the funds will be handed over to Hogan.

Gawker’s largest creditor is the WWE champ, followed by the law firm Morrison Cohen LLP, to which it owes $US115,000 in legal fees.

The website owes Hogan $US130 million while Denton is personally on the hook for $US10 million in punitive damages.

Gawker’s other creditors include an $US82,000 debt to the risk strategy company DeWitt Stern Group and $US67,000 to Google.

This article originally appeared in The New York Post