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Following losing their trial against former Pro Wrestler Hulk Hogan (Real name Terry Bollea) and also losing their appeal to pay Hogan $140 Million in damages, Gawker has today announced that they are filling for Chapter 11 Bankruptcy.
Unlike a Chapter 7, which declares insolvency for a corporation or organisation and the likelihood of operations ceasing, a Chapter 11 allows a company to continue operating while creditors seek to resolve credit issues if possible with restructuring used as a potential method and also makes the company available for takeover bids following a court's approval. However a court can rule that debts are denied becoming void and will convert the bankruptcy to Chapter 7.
Gawker is the owner of video game website Kotaku. It also runs Jezebel, Vallywag, Deadspin, Gizmodo and io9.
Publishing company Ziff Davis has been touted as a likely buyer of Gawker and sent out the following memo today:
I wanted to share some news about a potential acquisition for Ziff Davis. Earlier today, Gawker Media Group (GMG) filed for Chapter 11 bankruptcy. As part of that process, GMG plans to sell its media properties Gizmodo, Lifehacker, Kotaku, Jalopnik, Deadspin, Jezebel and Gawker.
Ziff Davis has entered into an asset purchase agreement to acquire all of these properties (free of GMG's liabilities), subject to the outcome of a Court-supervised auction. Under the Chapter 11 process, the Bankruptcy Court will soon set a schedule for other potential bidders to enter the sale process. There will then be an auction, which will likely take place at the end of July.
In the event we become the acquirer, the additions of Gizmodo, Lifehacker and Kotaku would fortify our position in consumer tech and gaming. With the addition of Jalopnik, Deadspin and Jezebel, we would broaden our position as a lifestyle publisher. Much like us, GMG is heavily active in driving commerce-based revenues and has an impressive publishing and commerce platform with Kinja.
As you can see, there’s a tremendous fit between the two organizations, from brands to audience to monetization. We look forward to the possibility of adding these great brands √¢‚Ç¨‚Äú and the talented people who support them √¢‚Ç¨‚Äú to the Ziff Davis family.
Ziff Davis currently owns and operates video game website mainstay IGN. There is no indication at this time that should Ziff Davis acquire Kotaku if it will continue to operate as a separate website, or merged with the existing IGN website.
Kotaku was at the center of the GamerGate hashtag controversy in 2014 when following The Zoe Post from Eron Gjoni, it was discovered that Kotaku writer Nathan Grayson had given positive coverage to Zoe Quinn's Depression Quest game without disclosing he financially supported the games development. Editor Stephen Totillo decided to take no further action and Kotaku, along with other video game websites, begun attacking gaming culture claiming it to be sexist and racists. However they have yet answered any calls to prove that is the case.
Kotaku was also famously blacklisted by Bethesda Games and Ubisoft for posting spoilers of stories after acquiring development materials while Fallout 4, Assassin's Creed Unity and Rogue were still under development.
Kotaku, along with Gawker and its sister publications, do not hold a great reputation among the public and are seen as the web equivalent of gutter press. Whoever possibly takes over Gawker won't just have to worry about the financial issues involving the company but also how it will build a positive reputation for the brand, if it can, heading into the future.