Bankruptcy Judge Orders Hulk Hogan’s Attorneys to Defer Lawsuit against Denton

by San Antonio Attorney

The litigation against Nick Denton of Gawker Media has been put on hold until July as ordered by Southern District of New York Bankruptcy Judge Stuart Bernstein to Hulk Hogan’s attorneys.

The purpose of Gawker’s hearing on July is to determine if Gawker’s owner is jointly responsible for the $140 million judgment and punitive damages awarded to Hogan for the invasion of privacy lawsuit against the media company.   Denton is seeking court protection against Gawker’s creditors as he is not covered by the Chapter 11 automatic stay.

When Hogan’s lawyers appeared before Judge Bernstein in court, they were told to “stand down” from pursuing a lawsuit in the Florida court.  Hogan’s lawyers want to sue Denton over misrepresentations they claim he made about the company’s stock value.

It is possible that Hogan will be involved in the bankruptcy further than the Denton clash.  In Chapter 11 cases of a corporation, the unsecured creditors of a debtor usually create an official committee to stand for their benefit in debt reorganization or sale discussions.  Based on court documents filed, the $140 million judgment and damages awarded by a jury to Hogan makes him the biggest unsecured creditor of Gawker.  Though it does not automatically mean that he will get a position in a committee of unsecured creditors, there is a possibility that he will secure a spot if that is what he wants.

At the hearing, the Gawker’s attorneys and bankruptcy judge talked about the likelihood of unsecured creditors forming a committee.  Both parties will find out prior to the trial whether a committee will be formed.

Gawker sought for bankruptcy protection bankruptcy on June 10, 2016 in an effort to stop the judgment from being enforced and to overturn the court ruling on appeal.  The initial bid for the company is $90 million by Ziff Davis.  A hearing for the approval of the Gawker’s sale process will be conducted on June 27.

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