Gawker’s Denton Tries Again to Halt $140 Million Court Judgment

  • Media executive faces bankruptcy without temporary halt
  • Denton lost invasion-of-privacy suit to wrestler Hulk Hogan

Nick Denton. Photographer: Andrew Harrer/Bloomberg

Gawker Media founder Nick Denton, seeking to stave off personal bankruptcy, asked a Florida appeals court to temporarily block wrestler Hulk Hogan from collecting the $140 million jury verdict in an invasion-of-privacy lawsuit.

In court papers Monday, Denton and former Gawker editor A.J. Daulerio, who published video excerpts of Hogan having sex with a friend’s wife, argue that they shouldn’t be forced to pay the judgment until after all their appeals are exhausted.

The jury verdict pushed New York-based Gawker itself into Chapter 11 in Manhattan last month, shielding it from immediately paying the $140 million. The judge in that case refused to extend court protection to the men, who are also liable for the damages award, saying they must file their own bankruptcies.

Denton claimed a temporary “stay of execution” from the judgment under the First Amendment of the U.S. Constitution, which guarantees freedom of the press. Allowing a verdict to drive a publisher into bankruptcy before all appeals are exhausted would mean “that constitutional right would have little force,” Denton said in court papers.

Hogan, whose court case is being funded by tech mogul Peter Thiel, opposes granting a temporary halt.

Sale Plan

While protected from Hogan in bankruptcy, Gawker plans to sell itself at an August auction. Ziff Davis has agreed to open the auction with a $90 million bid and to keep Denton on if it wins. Under bankruptcy court rules, Hogan’s judgment would be treated as an unsecured claim against Gawker, meaning he stands to collect a share of the sale proceeds only after more senior creditors are paid in full.

According to Gawker, Thiel has had it in for the company since 2007, when it outed him as gay. Thiel, who co-founded PayPal, has since publicly acknowledged that he’s gay and called Gawker’s now-defunct blog Valleywag the “Silicon Valley equivalent of al-Qaeda.” In a New York Times interview, he described his backing of Hogan and other litigants as a philanthropic way to help those who can’t afford to defend themselves against press attacks and intrusions.

The case is In re Gawker Media LLC, 16-11700, U.S. Bankruptcy Court, Southern District of New York (Manhattan).