Gawker Files For Bankruptcy, Begins Process Of Auctioning Itself Off
from the peter-thiel-gets-a-notch-in-his-belt dept
No matter what you think of Gawker, this is unfortunate news. The company has officially filed for Chapter 11 bankruptcy and begun the process of auctioning off its assets. Chapter 11 is an attempt to restructure debts (which include — mostly — the ~$130 million owed to Hulk Hogan after venture capitalist Peter Thiel funded Hogan’s questionable lawsuit against Gawker). You can read the bankruptcy petition, but this is the main thing you need to know:
Yeah, that’s the beginning of the list of their 20 largest creditors and it starts with Hogan’s “disputed” $130 million… and second place is some lawyers for $115k. So we’re talking a pretty big difference from the number 1 creditor to the number 2 creditor. Of course, as with many Chapter 11 bankruptcy filings, this is more about process than substance. The filing potentially lets Gawker stop the process on some other things and explore the various alternatives, including a fairly likely sale to another player. It doesn’t mean that the company is shutting down. Update: Apparently the plan is for Ziff Davis to buy Gawker, though others could potentially get into the bidding.
Either way, this is still unfortunate. Even if you believe the Hogan case was justified (and I think you’re wrong about that), we should still be concerned when a billionaire basically sets out to destroy a media organization through a variety of lawsuits (many of which appear to be extremely questionable).
What if the next billionaire who gets upset about coverage targets a publication you do like? And don’t say that it won’t matter if that publication doesn’t do anything wrong. Just the lawsuits alone can kill a company. And, even worse, the threat of lawsuits may create a massive chilling effect on what companies publish and how they go about their reporting. And disagree with Gawker’s decisions and tactics all you want, the company did break a ton of important news stories. While this does not mean the end of Gawker, it’s certainly the crippling of Gawker, and that should be a concern for anyone who believes in a free and open press.