Gawker’s Bankruptcy Plan Involves Paying Largest Creditors and Some Other Claimants

by San Antonio Attorney

Gawker Media is proposing a bankruptcy plan that would pay its biggest creditors as well as some other creditors, according to a legal representative of the company.

Its proposal includes paying $31 million to Hulk Hogan to settle a $140 million verdict last March in a lawsuit over invasion of privacy.

The proposal would also pay “certain claims” filed against its co-founder Nick Denton as well as ex- editor-in-chief A.J. Daulerio.  The two were supposed to pay $10 million and $100,000, correspondingly, said its lawyer Gregg Galardi.

Gawker filed for Chapter 11 bankruptcy months after the jury ordered the online new media to pay Hogan a large sum of money.  The company has since came to agreements with its other creditors, the court papers show.

A couple of those deals involve stories that became a subject of court case, the attorney said in court.

Gawker will pay $750,000 to Shiva Ayyadurai over a write-up contradicting his declaration as the inventor of electronic mail.

Freelance scribe Ashley Terrill will get half a million dollars to settle a lawsuit filed against Gawker over a write-up on her investigations in Tinder, as stated on court papers filed.

Gawker plans to sets aside a total of $40 million to pay outstanding debts, including the abovementioned lawsuits.  That means there will be around $8 million left after Terrill, Ayyadurai, and Hogan get paid.

The proposal would also allocate about $40 million to the stakeholders of Gawker Media.

Denton will likely get $10 million from the media company as a stakeholder, according to reports.

Completing the bankruptcy early could save the company an estimated total of $20 million in tax payments and legal fees.

U.S.  Bankruptcy Judge Stuart Bernstein seemed to agree with Gawker’s plan, but expressed concern about others possibly filing unexpected claims — and that the remaining $8 million might be insufficient under the proposal.

The settlement deal is still subject to the bankruptcy judge’s approval.

Hogan, whose real name is Terry Bollea, took legal action against Gawker for invading his privacy by publishing a video of him having intercourse with the wife of his best friend.

 

 

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