Gawker Gets $22 Million Bankruptcy Loan (Report)

Nick Denton’s company would be forced to shut down without cash infusion from Cerberus Capital Management

Gawker Media Group has received a $22 million loan during its bankruptcy proceedings to stay afloat as it awaits a pending sale, according to media reports.

Wall Street Journal reports Cerberus Capital Management has agreed to give Nick Denton’s company $14 million on an interim basis, with another $8 million to be provided upon final bankruptcy court approval.

Reps for the company did not immediately respond to TheWrap’s request for comment.

Last week, Gawker entered into an asset purchase agreement to sell its seven media brands to Ziff Davis.

The sale will be conducted via bankruptcy court auction, during which other prospective buyers can bid up the price for the company. TheWrap previously reported that Gawker received “multiple” bids in excess of $100 million.

During the sale process, GMG will maintain normal operations, which it is now able to do thanks to the Cerberus loan. The cash infusion is expected to cover employee and vendor costs, as well as a $12.3 million loan from creditor Silicon Valley Bank.

Gawker filed for Chapter 11 protection from creditors to offer the business free and clear of legal liabilities.

The bankruptcy papers, filed in New York, list Gawker’s assets between just over $50 million and $100 million, and its liabilities between just over $100 million and $500 million. The number of estimated creditors is listed as between 200 and 999.

The biggest creditor by far listed in the papers is Terry Bollea, a.k.a. pro wrestling legend Hulk Hogan, whom the papers say is owed $130 million, though that debt is disputed.

The second largest creditor is the law firm Morrison Cohen LLP, with $115,379.48 owed.

In March, a jury awarded Hogan $115 million in compensatory damages, after the wrestler sued Gawker for publishing portions of a sex tape featuring him and the then-wife of radio DJ Todd “Bubba the Love Sponge” Clem. An additional $25 million in punitive damages was tacked on shortly thereafter.

Hogan had argued that Gawker’s publication of the sex-tape footage violated his privacy. In May, a judge upheld the verdict, denying Gawker’s request to reduce the damages.

Gawker is appealing the Hogan lawsuit.

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