Gawker, Parent Company of Jalopnik, Files for Bankruptcy

Reuters is reporting that Gawker Media, parent company of automotive website Jalopnik, has filed for Chapter 11 bankruptcy.

A judge recently ordered the company to pay $140 million in damages after it aired a 2007 sex tape featuring former wrestler Hulk Hogan, who then sued Gawker for invasion of privacy. The company had requested a stay, but was denied based on the terms they laid out.

The New York Times reports that Gawker Media will now put itself up for sale, according to a source close to the matter. The source claims the company is starting a yet-to-be announced auction, and that digital media company ZiffDavis already submitted a starting bid of $90 million to $100 million.

The online media company, founded and owned by Nick Denton, launched its namesake website in 2003. It since spawned a number of sites, including Deadspin, Kotaku, Lifehacker, Gizmodo, Jezebel and Jalopnik.

Denton argued his First Amendment rights allowed the company to post the leaked Hogan tape, which was posted to Gawker in 2012. The trial wrapped up in March, with the jury awarding Hogan $115 million in compensation. That tally was later bumped upward by $25 million, despite the fact that Hogan (whose real name is Terry Bollea) had only asked for $100 million.

Wealthy technology investor Peter Thiel admitted to bankrolling Bollea’s legal action.

Gawker started the appeal process soon after, but the Florida judge overseeing the case denied the company a new trial in late May. The company still plans to appeal.

Filing for bankruptcy could allow the company to continue its operations. Earlier this year, Gawker sold its minority stake in an investment company to prepare for the trial.

Gawker Media is worth about $83 million, according to figures that came out during the trail, and owns assets worth between $50 million and $100 million.

[Image: Scott Beale/ Flickr]