Hulk Hogan Wrestles Gawker to the Ground: Gawker Files for Chapter 11 Bankruptcy Protection

Okay, so let's get the sequence of events clear here: Hulk Hogan permissively has sex with a friend's wife, which the husband films. Hulk Hogan Sex Tape is somehow obtained by celebrity gossip site Gawker, and posted on the internet for all to see. Hogan get's mad, files lawsuit in Florida, and tells his story tearfully to a jury. Jury awards Hogan $140 million and this morning, Gawker files for reorganization under Chapter 11 of the US Bankruptcy code. Got all that?

Celebrity gossip website Gawker filed for protection under the U.S. Bankruptcy code on June 10th in US Bankruptcy Court in New York, after counsel for Gawker told a Florida State judge that it could not pay a $140 million jury award to professional wrestler and actor Hulk Hogan for posting his private sex tape online without his (or presumably her) permission.

Terry Gene Bollea (born August 11, 1953), better known by his ring name Hulk Hogan, is an American professional wrestler, actor, television personality, entrepreneur and rock bassist. IGN described Hogan as "the most recognized wrestling star worldwide and the most popular wrestler of the '80s".

The filing says that Gawker intends "the process of marketing and selling assets of the company." This is typical in a bankruptcy proceeding, and in a Chapter 11, most frequently insiders are Secured Creditors who have an inside track to purchase the assets.

Hulk Hogan is an unsecured creditor, and his $140 million jury award is perfectly dischargeable in bankruptcy. Meaning Hogan would never collect any of it. Well, unless some one buys the assets of the Company, which of course someone will. Either Hogan or the owners of Gawker.com will buy the website, if this Chapter 11 is typical, and then the money will be paid to creditors, primarily Hogan.

While the judgment amount set by the Florida State Court jury is instructive, the claim is till "uncertain and unliquidated." Meaning $140 million is not set in stone. Real world, Gawker Founder Nick Denton's lawyers will get on the phone with Hogan's lawyers, and negotiate an amount of money lower than $140 million, for Denton to pay Hogan to buy his claim.

The List of Assets and Creditors, which is signed under oath, says that Gawker has between 200 and 1,000 creditors, between $50 million and $100 million in assets and $100 million to $500 million in liabilities. These numbers are often variable.

Gawker says that it intends to use two loans to continue in operation during the Chapter 11 proceeding, which may take 2 years. One loan is for $7.6 million by Silicon Valley Bank. The second loan is for $15 million, by Menlo Park venture capital firm USVC Partners.

Gawker's largest creditor is Hogan, followed by Gawker's own law firm Morrison Cohen LLP, to which it owes $115,000 in legal fees. It is an irony of bankruptcy that most often, creditors own large amounts to law firms which are perfectly dischargeable in bankruptcy.

Other creditors include an $82,000 debt to the risk strategy company DeWitt Stern Group and $67,000 to Google.

Bollea enjoyed mainstream popularity in the 1980s and 1990s as the all-American character Hulk Hogan in the World Wrestling Federation (WWF, now WWE), and as "Hollywood" Hulk Hogan, the villainous nWo leader, in World Championship Wrestling (WCW). A regular pay-per-view headliner in both organizations, he main-evented the respective premier annual events of the WWF and WCW, WrestleMania and Starrcade, multiple times. Hogan was inducted into the WWE Hall of Fame in 2005. He was signed with Total Nonstop Action Wrestling (TNA) from 2009 until 2013, in which he was the on-screen General Manager and an occasional wrestler.

Hogan is a twelve-time world champion; a six-time WWF/E World Heavyweight Champion and six-time WCW World Heavyweight Champion. He was the first wrestler to win consecutive Royal Rumbles, in 1990 and 1991.