Gawker founder Nick Denton files for bankruptcy

Nick Denton has filed for bankruptcy protection in New York after a bruising legal battle with Hulk Hogan.

Gawker Media founder Nick Denton has filed for personal bankruptcy. Picture: AP Photo/Steve Nesius.

Nick Denton, who founded Gawker Media out of his apartment in 2002, has filed for personal bankruptcy, following a bruising legal battle with former professional wrestler Hulk Hogan.

Mr Denton filed for chapter 11 protection at the US Bankruptcy Court in New York, which will automatically freeze any legal action against him and prevent Terry Bollea, the wrestler’s actual name, from collecting a $US140 million invasion-of-privacy judgment a jury awarded earlier this year.

The judgment, which is being appealed, led Gawker to file for chapter 11 protection in June.

Mr Denton’s personal bankruptcy follows a final blow from a Florida judge in a string of legal defeats, which left the media executive with little choice but to seek court protection.

On Friday, a Florida judge denied Mr. Denton’s emergency request for protection from the judgement. Gawker’s founder said it was a “bitter day for me” but that he remains hopeful about a second act for his company.

The Gawker founder is personally liable for $US10 million of the judgment and jointly liable, along with former Gawker editor A.J. Daulerio, for another $US115 million. Mr Denton, who listed assets of less than $US50 million in his chapter 11 petition, has said he can’t afford to pay judgment.

His only two assets, he says, are his 30 per cent stake in Gawker and an apartment in Manhattan, which he lists at a combined value of less than $US50 million.

Court papers show Mr. Denton is facing about $US150 million in additional liabilities stemming from pending litigation with other subjects of Gawker articles who have sued the company and Mr Denton. Among his other liabilities are $US50,000 he borrowed from his retirement savings and more than $US18,000 in credit card debt.

Mr Bollea’s litigation is being funded by Silicon Valley billionaire Peter Thiel, who was outed as gay in 2007 by Gawker’s now-defunct Valleywag blog. Mr Thiel has acknowledged backing a number of lawsuits against Gawker, Mr Denton and other former writers.

“It’s a disturbing to live in a world in which a billionaire can bully journalists because he didn’t like the coverage,” Mr Denton said in a memo to his staff overnight. “We’ve spoken truth to power. Sometimes uncomfortable truths. Sometimes gossipy truths. But truths. There is a price to pay for that, and I am paying it now.”

Mr Bollea sued Gawker, Mr Denton and other current and former Gawker employees after the blog published a video of Mr Bollea having sex with the wife of a Florida radio shock jock.

“On this bitter day for me, I am consoled by the fact that my colleagues will soon be freed from this tech billionaire’s vendetta,” Mr Denton said in a tweet on Monday.

Mr Denton asked courts in both Florida and New York to step in and block the jury award while it works its way through appeals courts, but judges in both states refused. Lawyers for Messrs. Denton and Daulerio said in court papers that the duo should be able to pursue an appeal without facing financial ruin.

David Houston, a lawyer for Mr Bollea, said Monday “the time has come for Nick Denton to accept responsibility for the decisions he made and the rewards he reaped based on the suffering and humiliation of others.”

Mr Bollea’s lawyer said Mr Denton’s bankruptcy has nothing to do with who paid Mr Bollea’s legal bills but rather is the result of Mr Denton’s own choices and accountability.

“If even one person has been spared the humiliation that Mr Bollea suffered, this is a victory,” Mr Houston said.

Personal bankruptcy will open a public window into Mr Denton’s finances, subject him to court oversight and potentially invite creditor investigations. Mr Denton has said he expects his bankruptcy to be “anything but straightforward.”

Gawker is headed to the auction block later this month and has already lined up a lead bid of $US90 million from Ziff Davis LLC.

“Gawker Media Group’s resilient brands and people will thrive under new ownership, when the sale closes in the next few weeks,” Mr Denton said in a Tweet. In the note to his staff, Mr. Denton says the business remains in “amazingly robust shape.”

Bids for the company, which has attracted attention from more than a dozen potential purchasers according to Mr. Denton, are due on August 15.

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