Gawker Media reached a settlement in the invasion-of-privacy lawsuit brought by Hulk Hogan and backed by Peter Thiel that drove the web company into bankruptcy.
Hogan, the former pro wrestler whose real name is Terry Bollea, will get $31 million in cash plus a share of creditor proceeds in Gawker’s bankruptcy, according to papers filed Wednesday in Manhattan federal court. The pact resolves a $130 million judgment that Hogan won against the company and its founder, Nick Denton, in a lawsuit over the publication of video excerpts of Hogan having sex with a friend’s wife.
The suit, in Florida state court, had been financed with help from Thiel, the PayPal co-founder and outspoken critic of Denton’s company. According to court papers, Gawker also resolved two similar lawsuits for $500,000 and $750,000.
“All-out legal war with Thiel would have cost too much, and hurt too many people, and there was no end in sight,” Denton said in a blog entry Wednesday announcing the agreements.
The settlements will “dramatically reduce” the assets available for other general unsecured creditors in the bankruptcy, Gawker said in court papers.
“As with any negotiation for resolution, all parties have agreed it is time to move on,” David Houston, a lawyer for Bollea, said in an emailed statement.
Gawker filed for bankruptcy in June after the Florida court refused to halt enforcement of the verdict while the company appealed. The majority of its assets were sold to a unit of Univision Holdings Inc. for $135 million, leaving behind liabilities including the Hogan claim to be wound down in bankruptcy.
Denton, who was jointly liable for the verdict, also filed for personal bankruptcy. According to court papers, he and Gawker are in talks over the settlement and hope to resolve matters in time to confirm the company’s bankruptcy plan.