Founded in 2003, Gawker Media LLC (Gawker) operated an online media company and blog network, serving as the parent company of several weblogs and subsites including: Gawker.com, Deadspin, Lifehacker, Gizmodo, Kotaku, Jalopnik, and Jezebel. Known for its brashness, and widely regarded as a go-to site for celebrity and entertainment gossip, Gawker.com routinely courted controversy for some of the news items it published.
In October 2012, Gawker was the named defendant in an Invasion of Privacy lawsuit brought by former professional wrestler Terry Bollea (professionally known as Hulk Hogan) related to the alleged unauthorized publication of a personal video. The case garnered more attention when it became known that billionaire Peter Thiel, a Paypal co-founder, helped finance the lawsuit against Gawker. Following a lengthy legal battle, in March 2016 a jury found Gawker liable and awarded Bollea $115 million in damages. As a result of the judgement in favor of the plaintiff, Gawker filed for Chapter 11 bankruptcy protection in the Southern District of New York in June 2016.
When Gawker filed Chapter 11, the company listed over $50 million in assets and over $100 million in liabilities. In close collaboration with the company’s Chief Restructuring Officer (CRO) and his team at Opportune, Stretto was engaged to provide depository and banking services in conjunction with the bankruptcy proceedings. By leveraging long-standing bank relationships and relying on decades of in-house expertise, Stretto expedited the opening of multiple bank accounts in compliance with the United States Bankruptcy Code. Drawing on streamlined processes and expedited workflows, Stretto facilitated the Chapter 11 case from a deposit-management perspective.
Working with specific financial-services partners, Stretto quickly established necessary bank accounts and handled the related collateral requirements. The accounts were not subjected to standard service fees and were also earning interest, providing greater return to creditors and helping to reduce professional fees in the case. To further alleviate administrative burdens and increase overall operational efficiency, Stretto’s in-house Banking Services Team, comprised of industry professionals with significant corporate-restructuring expertise, facilitated all account transactions, including disbursements, allowing the CRO and other key stakeholders to focus on the more substantive aspects of the case. Gawker sold the business in August 2016 to Univision for $135 million. Gawker.com, which was at the center of the Hulk Hogan lawsuit, was shut down, while Gawker Media relinquished its name. The sites that Univision acquired now operate under Gizmodo Media Group. Bollea’s lawsuit was settled in November 2016 for $31 million.
For more information about Stretto’s Corporate-Restructuring solution, please contact Brian Soper.