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Gawker Media Group, the company behind online publications like Gizmodo, Jezebel and Lifehacker, has filed for Chapter 11 bankruptcy after losing an embarrassing lawsuit to former professional wrestler Hulk Hogan (whose real name is Terry Bollea). After being hit with a judgment demanding Gawker Media Group pay Bollea $140.1 million, the company was at risk of losing its assets to creditors. Some people have wondered if Gawker Media Group, a company whose publications thrived on scandal and controversy, could survive after losing its case against Bollea. The struggling media company’s situation creates an ideal context to discuss the benefits of Chapter 11 bankruptcy.
Gawker Media Group’s Situation Can Show Us the Benefits of Chapter 11 Bankruptcy
Although Gawker Media Group has filed for Chapter 11 bankruptcy, that does not mean its days of writing snarky articles and engaging in controversy are over. Keep in mind that in addition to filing for Chapter 11 bankruptcy, Gawker Media Group plans to appeal its case.
During its Chapter 11 bankruptcy (once approved by the judge), Gawker Media Group can reorganize its business and finances under court supervision. In addition to reorganizing itself, Gawker Media Group’s assets would remain protected from seizure by creditors. Unsurprisingly, Gawker Media Group filed for Chapter 11 bankruptcy almost immediately after a Florida judge gave Bollea permission to issue liens on the company’s properties.
Gawker Media Group would auction its assets under the supervision of the court. The largest potential bidder is Ziff Davis, which has offered $90 million. This bid only sets the floor for other possible bids, which could increase beyond $100 million. Throughout the Chapter 11 bankruptcy process, Gawker Media Group can also continue operations. Not only is the company protecting its business interests, it is staying profitable.
Yes, Gawker Media Group is not in the greatest position it has ever been in, but it is not dead. In fact, Gawker Media Group’s bankruptcy is an excellent example of how filing for Chapter 11 can give businesses facing dire situations a second chance.
The Kansas City bankruptcy attorneys at The Sader Law Firm can help businesses facing difficult situations find solutions.
