Gawker Media files for bankruptcy

Gawker Media has filed for bankruptcy, according to documents filed today in Southern District of New York Bankruptcy Court. The filing lists the company's assets as between $50 and $100 million, with liabilities as high as $500 million.

The company's finances are still reeling from a judge's ruling in March that fined the company $140 million for publishing a video of Hulk Hogan having sex. While still subject to appeal, that ruling required the company to present a $50 million bond, a sum that significantly exceeded the company's cash reserves.

The lawsuit was later revealed to be part of a larger punitive legal campaign against the company, secretly funded by Paypal billionaire Peter Thiel. Thiel has admitted to funding the lawsuits as a deterrence campaign against the publication, a decision he came to after a 2006 incident in which a Gawker publication reported on his sexuality. In an interview with The New York Times, Thiel referred to his campaign against Gawker as "one of the best things I've done."

It is still unclear what effect this filing will have on the company's future. Legally, the filing will trigger a public auction for ownership of the company's assets, although founder Nick Denton has pledged to continue Gawker's legal fights and publishing operations. Publisher Ziff Davis has offered an initial bid as high as $100 million, as first reported byRecode. Denton confirmed the bid in a statement, saying, "we are encouraged by the agreement with Ziff Davis, one of the most rigorously managed and profitable companies in digital media."

Gawker publications have a long history of often controversial muckraking, breaking stories on The Silk Road, Manti T'eo, and ideological biases in Facebook's Trending Topics module, among others. A number of pundits have raised concerns about the possible chilling effects of Thiel's campaign, including Margaret Sullivan of The Washington Post. "When a vindictive billionaire can muscle his way into a lawsuit with the intention of putting a media company out of business," Sullivan wrote, "there’s reason to worry."