Gawker Media disclosure statement OK’d; plan hearing begins Dec. 13

By Caroline Salls

Pittsburgh, Nov. 4 – Gawker Media, LLC received court approval of the disclosure statement for its plan of liquidation, according to an order filed Friday with the U.S. Bankruptcy Court for the Southern District of New York.

The plan confirmation hearing is scheduled to begin on Dec. 13.

As previously reported, Gawker reached three new settlement agreements, including a settlement of a $130 million judgment awarded to Terry Gene Bollea, also known as Hulk Hogan.

Specifically, Gawker said it settled all of the claims related to Bollea’s lawsuits, including compensatory and punitive damages claims, claims based on theories of veil piercing, substantive consolidation, or alter ego.

Under the settlement, Gawker will pay $31 million in cash to Bollea, and Bollea will receive a share of a 45% portion of some Gawker Media contingent proceeds.

In addition, the company said it settled defamation, breach of contract and other claims filed by Ashley Terrill and libel and other claims filed by Shiva Ayyadurai.

Terrill agreed to settle her claims in exchange for a $500,000 cash payment, and Ayyadurai will receive $750,000 in cash.

Under the plan, holders of second-lien make-whole claims will receive a share of $500,000 in cash on the plan effective date, plus cash remaining after other specified claims have been paid in full.

Priority claims will be paid in full in cash.

Holders of Gawker Media Group, Inc. (GMGI) debtor general unsecured claims will receive a share of a cash distribution, plus post-bankruptcy interest.

Holders of general unsecured convenience claims will receive the lesser of the full amount of the claim and $25,000.

Holders of GMGI debtor preferred equity interests will receive a share of cash remaining after second-lien make-whole claims have been paid in full. Holders of common equity interests will receive a share of cash remaining after preferred interests are paid.

Holders of Gawker Media general unsecured claims will receive a share of cash in a Gawker Media claims reserve, a share of a contingent proceeds creditor account, a share of cash in the second-lien make-whole reserve and a share of a GMGI plan guaranty reserve.

Holders of Gawker Media membership interests will receive a share of contingent equity proceeds and cash remaining after satisfaction of other specified claims.

Gawker, a New York-based online media company, filed for bankruptcy on June 10. The Chapter 11 case number is 16-11700.

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