Gawker files for Chapter 11 bankruptcy and is planning to sell

Gawker Media LLC, the online publisher ordered by a U.S. judge to pay $140 million to former wrestler Hulk Hogan over the publication of a sex tape, filed for Chapter 11 bankruptcy protection on Friday and is planning to put itself up for sale.

The move will intensify public debate in the United States over the role of big money in media lawsuits. Billionaire investor Peter Thiel, an early backer of Facebook and a co-founder of PayPal had bankrolled Hogan’s lawsuit.

Hogan, whose real name is Terry Bollea, is listed as the largest creditor in Gawker’s bankruptcy filing.

Media company Ziff Davis LLC has entered into an agreement to buy Gawker in a bankruptcy auction for a little less than $100 million, according to a people familiar with the matter.

In the filing, Gawker said its assets are estimated to be worth $50 million to $100 million, whereas its liabilities are estimated to be between $100 million and $500 million.