Thrown by Hulk Hogan sex tape case, Gawker declares bankruptcy

Last Updated Jun 10, 2016 2:57 PM EDT

Embattled Gawker Media on Friday filed for bankruptcy protection. The Chapter 11 filing comes less than three months after a lawsuit brought by ex-wrestler Hulk Hogan resulted in a $140 million judgment against the digital publisher.

In declaring bankruptcy, Gawker also has agreed to sell its seven media brands and other assets to digital media company Ziff Davis as part of a court-supervised auction. The deal allows other bidders to submit competing offers for Gawker.

A jury in March sided with Hogan, whose real name is Terry Bollea, after he filed suit alleging that Gawker in 2012 had violated his privacy by publishing parts of a video that showed him having sex with his former best friend's wife.

Gawker said in the bankruptcy filing that its assets are worth $50 million to $100 million, while its liabilities are estimated at $100 million to $500 million. The filing was made in the U.S. bankruptcy court for the Southern District of New York.

"[D]espite its long-running success and commendable growth trajectory, Gawker Media suffered this year from exorbitant legal expenses and the recent judgment," the company said in a legal motion related to the bankruptcy petition (see filing at bottom).

Along with Gawker.com, the company's sites include Deadspin, Gizmodo, Jezebel and Lifehacker. The sites have a total global readership of 90 million, according to Gawker.

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In a statement, Gawker co-founder Nick Denton said the company's brands would mesh well with Ziff Davis, whose media assets include gaming outlet IGN and lifestyle site AskMen.

"We have been forced by this litigation to give up our longstanding independence, but our writers remain committed to telling the true stories that underpin credibility with our millions of readers," Denton said in a statement. "With stronger backing and disentangled from litigation, they can perform their vital work on more platforms and in different forms."

Gawker also said joining forces with Ziff Davis would allow it to continue funding a legal appeal of the Bollea judgment. No terms of the deal were disclosed. Gawker said it remains confident that it will prevail in the suit.

Billionaire technology investor Peter Thiel has acknowledged bankrolling Bollea's suit against Gawker, along with other litigation against the publisher. That was apparent retribution for Gawker site Valleywag revealing that the PayPal co-founder is gay in 2007, as well as for other posts critical of Thiel.

Denton, a former reporter for the Financial Times, launched Gawker in 2002. It quickly became known for its snarky reportage and commentary on celebrities, popular culture and Silicon Valley. In more recent years it has also focused on politics and other major issues of the day.

"Even with his billions, Thiel will not silence our writers," Denton said Friday in a tweet. "Our sites will thrive -- under new ownership -- and we'll win in court."

-- The Associated Press contributed to this report.