Gawker Media filed for bankruptcy protection in New York Friday after losing an invasion of privacy suit involving the former professional wrestler known as Hulk Hogan.
Gawker listed the $140 million verdict from the lawsuit brought by Hogan, whose real name is Terry Bollea, as a "disputed" claim in its Chapter 11 petition.
The bankruptcy would shield New York-based Gawker from paying the potentially crippling damages awarded by a Florida jury while the company seeks a buyer. The digital media company also asked the court to shield founder and CEO Nick Denton from the Hogan suit and other litigation.
Gawker said in a statement that Ziff Davis has agreed to purchase its assets if no better offers emerge in a court-supervised auction. Ziff Davis agreed to pay around $100 million, according to a person familiar with the matter, who asked not to be identified because the pricing isn't public.
"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," the company said in the statement, adding that it failed to persuade the Florida court to stay the litigation while Gawker challenges the verdict.
The bankruptcy and sale "are intended to preserve the value" of Gawker and fund its appeal of the Hogan verdict, according to the statement. Bankruptcy would allow the assets to be sold "free and clear" of legal liabilities, the company said.
The company hired a banker last month to explore strategic options, including a possible sale, amid the legal clash with Mr. Bollea, which was secretly bankrolled by billionaire investor and Facebook board member Peter Thiel.
Gawker and Mr. Thiel have a contentious history: The website outed him as gay in 2007. Thiel has since publicly acknowledged that he's gay, and called Gawker's now-defunct blog Valleywag the "Silicon Valley equivalent of al-Qaeda." The dispute has evolved into a clash of tech titans, as First Look Media, a news organization founded by Silicon Valley billionaire Pierre Omidyar, has said it will support Gawker.
In an internal memo to employees, Ziff Davis CEO Vivek Shah said acquiring the Gawker websites Gizmodo, Lifehacker and Kotaku "would fortify our position in consumer tech and gaming." Shah's memo didn't mention the Gawker.com flagship site.
Ziff Davis is focused on the brands in the tech, gaming and lifestyle categories, which contribute the vast majority of Gawker Media's revenue, according to the person familiar with the matter.
"We have been forced by this litigation to give up our longstanding independence, but our writers remain committed to telling the true stories that underpin credibility with our millions of readers," Mr. Denton said in the company statement.
In a statement last month, Mr. Thiel said he was proud to have supported Mr. Bollea in a fight against a "bully's gross violation of privacy."
"Gawker, the defendant, built its business on humiliating people for sport," Mr. Thiel said. "They routinely relied on an assumption that victims would be too intimidated or disgusted to even attempt redress for clear wrongs. Freedom of the press does not mean freedom to publish sex tapes without consent. I don't think anybody but Gawker would argue otherwise."
-- Bloomberg News