On Wednesday, Gawker published a statement that the company’s legal battle with Hulk Hogan over the publishing of an excerpt of a sex tape would be coming to a close.
“After four years of litigation funded by a billionaire with a grudge going back even further, a settlement has been reached,” wrote Denton. “The saga is over.”
According to bankruptcy papers filed Wednesday, Hogan will be receiving $31 million plus a share of distributions from a contingent proceeds creditor account. He may also be gaining more in a separate deal with Denton.
After nearly four years of litigation, the case went to trial in March. He was awarded $140 million in compensatory and punitive damages from Gawker, Denton and Daulerio. The trial judge later upheld the verdict.
Gawker expressed its hope that its First Amendment arguments would lead to a different outcome on appeal, but the verdict created financial pressures on the company. In July, Gawker declared Chapter 11 bankruptcy, and some of the company’s blogs were sold to Univision for $135 million after an auction.
Meanwhile, the revelation that Silicon Valley billionaire Peter Thiel had secretly provided financial backing to Hogan created another explosive turn. The PayPal co-founder reportedly contributed money not only to Hogan, but also to others like purported email inventor Shiva Ayyadurai to sue Gawker. Many were represented by Hollywood attorney Charles Harder. Thiel was outed as gay by one of Gawker’s old tech publications, but he denied that his funding was the result of a grudge. At a recent press conference, Thiel explained that he found Gawker’s reporting to be distasteful and commented, “If you’re a single-digit millionaire like Hulk Hogan, you have no effective access to our legal system. It costs too much.”
In bankruptcy court, the parties were prepared to argue about distribution of the Univision proceeds as well as next steps. Gawker was eyeing a possible lawsuit against Thiel. But according to Denton, it’s all over.
The parties are due in court Thursday and are expected to discuss the settlement, which calls for Ayyadurai to get $750,000 and journalist Ashley Terrill to get $500,000 to settle their own lawsuits. It’s said in the bankruptcy papers that ” baseline benefit is higher than the alternative of fully litigating the disputes resolved under the Plan Settlements.”
The settlement will require the bankruptcy judge’s approval.
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