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 The decision represents a victory for Hogan as well
billionaire investor Peter Thiel, an early backer and board
member of Facebook Inc <FB.O> who helped fund Hogan's lawsuit
following the publication of an article by Gawker about Thiel's
homosexuality.
"This story will conclude with Gawker Media's popular brands
sheltered under new ownership and the importance of a free and
critical press reaffirmed by the courts. In the end, the
Facebook board member will have nothing to show for his petty
grudge other than legal expenses and a reputation for thin
skin," Denton said in a statement.
Thiel did not immediately respond to a request for comment.
Gawker, a U.S. internet publisher, filed for Chapter 11
bankruptcy protection in June after Hogan won a $140 million
judgment against the company over the publication of excerpts
from a sex tape, $125 million of which Denton is liable for,
according to court filings.
Attorneys for Gawker had asked the court for the same
protections for its founder, including a shield from lawsuits.
The court had only agreed to give Denton temporary protections.
Stuart Bernstein, U.S. bankruptcy court judge for the Southern
District of New York, declined on Tuesday to extend the shield.
Attorneys for Gawker argued that without the shield, Denton
would be distracted by his own personal bankruptcy process.
Gawker's business and its plan to sell itself in bankruptcy
would suffer, they said.
Gawker and its investment bankers are now soliciting acquisition
offers for the company. When Gawker filed for bankruptcy, it had
an agreement from online publisher Ziff Davis LLC to buy the
company for $90 million, but this was only meant to be a
stalking horse bid setting the floor price in an auction process
that is now underway.
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Prior to the ruling, Denton said a personal bankruptcy process would
be major distraction to him helping navigate Gawker through its
auction, arguing that he would be playing a crucial role.
"I know they are going to want to speak to me,” Denton said in court
Tuesday of other potential bidders for Gawker. "I’m the founder of
the company. I know where all the bodies are buried.”
Hogan's attorneys argued that Denton's personal bankruptcy would not
weigh on Gawker because the company already had in place an
executive team and outside professionals who would be able to
execute the sale.
Denton said that Gawker had loaned him money to pay for his personal
bankruptcy attorney, and that he had met with the attorney twice. In
court papers, Hogan’s attorney stated that the loan was for
$200,000.
Denton said in court that he has two assets, his equity in his
apartment and his stock in Gawker. Denton owns about 30 percent of
Gawker. The value of the equity of his apartment was not referenced
in court.
(Reporting by Jessica DiNapoli in New York; Editing by Alan Crosby
and Diane Craft)
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