Companies that seek bankruptcy protection are driven to that decision for a variety of reasons. For many, it may be due to the inability to nimbly change directions as required by the market. For others, the cause may be an unexpected award for the plaintiff in a legal dispute. The latter was the cause that required Gawker Media to recently file for Chapter 11 bankruptcy, and readers in Kentucky facing similar situations may be interested in the details of the case.
After a lengthy legal battle, Gawker was recently ordered to pay approximately $140 million to the famous wrestler Hulk Hogan. This decade-long lawsuit began when Hogan sued Gawker because of a leaked sex tape that showed the wrestler with the wife of his former best friend. The suit became an especially hot topic of conversation in the industry when it was revealed that a co-founder of PayPal, billionaire Peter Thiel, secretly spent around $10 million in order to support Hogan's suit.
The largest creditor in the bankruptcy filing is Bollea (Hogan), though there are additional major creditors such as Google, content-distributor SimpleReach, an insurance broker, and a law firm. Gawker had previously gotten a bid for approximately $100 million from Ziff Davis for its assets prior to the bankruptcy filing. However, Gawker's assets will now go up for auction, which will most likely be supervised by the bankruptcy court.
Every company in Kentucky that considers filing for Chapter 11 bankruptcy will inherently have unique situations surrounding its assets and liabilities. Regardless of the circumstances, it may be beneficial to seek the counsel of an attorney who focuses on bankruptcy law. An attorney who practices this type of law will be able to properly evaluate a client's unique financial situation and discuss the different kinds of bankruptcy and debt relief that are available.
Source: USA Today, "Gawker files bankruptcy after Hogan lawsuit as Ziff Davis shows interest", Roger Yu, June 10, 2016