Gawker Media LLC, the online publisher ordered by a US court to pay $US140 million ($184 million) to former wrestler Hulk Hogan over the publication of a sex tape, has filed for bankruptcy protection and is planning to put itself up for sale.
The move is expected to intensify public debate in the United States over the role of big money in media lawsuits.
Billionaire investor Peter Thiel, an early backer of Facebook and a co-founder of PayPal, had bankrolled Hogan's lawsuit.
Hogan, whose real name is Terry Bollea, is listed as the largest creditor in Gawker's bankruptcy filing.
Media company Ziff Davis LLC already has an agreement to buy Gawker for a little less than $US100 million, according to people familiar with the matter.
However a bankruptcy auction will ensue, likely at the end of July.
If no other bidders step up with better offers, Ziff Davis will become Gawker's new owner, the people said.\
Ziff Davis, whose gaming and consumer technology websites include AskMen, Computer Shopper and Geek.com, would significantly expand its internet portfolio with the acquisition of Gawker, gaining websites such as Gizmodo, Lifehacker, Kotaku, Jalopnik, Deadspin and Jezebel.
"There's a tremendous fit between the two organisations, from brands to audience to monetisation," said a spokesman for Ziff Davis.
"We look forward to the possibility of adding these great brands — and the talented people who support them — to the Ziff Davis family."
In the filing, Gawker said its assets are estimated to be worth $US50 million to $US100 million, whereas its liabilities are estimated to be between $US100 million and $US500 million.
Gawker has vowed to appeal the verdict in the Hogan lawsuit.
In a post-trial hearing in St Petersburg, Florida, on Friday, the New York-based company argued that it could not pay a bond on the $US140 million judgment.
"A high bond like that is effectively the same as not allowing the stay," Michael Berry, an attorney for Gawker, told the court hearing.
"My client faces financial ruin. The verdict could be overturned or reduced."
Source :http://www.abc.net.au/
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