Peter Thiel Wants Gawker.com to boil in it's own slime

Peter Thiel is demanding that he be given the chance to bid on Gawker.com, the gossip and news website he helped drive out of business and which is now being shopped in bankruptcy.

By

Jonathan Randles

Peter Thiel is demanding that he be given the chance to bid on Gawker.com, the gossip and news website he helped drive out of business and which is now being shopped in bankruptcy.

Lawyers representing Mr. Thiel said in papers filed Wednesday in the U.S. Bankruptcy Court in New York that the billionaire venture capitalist is “the most able and logical purchaser” of Gawker.com but that, so far, his overtures have been rebuffed by the administrator overseeing the sale process.

“Obviously, if Mr. Thiel is allowed to bid on a level playing field, value will be maximized; if not, it won’t,” lawyers for Mr. Thiel said. The filing says Will Holden, a managing director at Dacarba LLC, the firm overseeing the sale process, should be required to afford Mr. Thiel “a fair opportunity to submit a competitive bid.”

Wednesday’s filings were first reported by Buzzfeed News.

Mr. Thiel’s interest in the website, which has been dormant since August 2016, adds a new twist to the continuing legal wrangling between him and publisher of the blog, Gawker Media LLC. Mr. Thiel secretly financed Hulk Hogan’s lawsuit against the publisher, the ruling on which by a jury forced the Gawker Media and its founder Nick Denton into chapter 11 last year and, ultimately, out of business.

The filing also raises a new question about the ultimate fate of Gawker.com and its archive. The Wall Street Journal reported in October that the sale process had put Gawker’s articles at risk of being deleted. A new owner of Gawker.com would be free to remove old articles from the website. Assets for sale include the Gawker domain, social media accounts and nearly 200,000 published articles.

Last year at the National Press Club in Washington, D.C., Mr. Thiel said Gawker was a “singularly sociopathic bully” that ruined people’s lives. Gawker published a story in 2007 that identified Mr. Thiel as gay, which he has said violated his privacy. The lawsuit by Terry Bollea, Hogan’s real name, concerned publication of excerpts of the wrestler’s sex tape on Gawker.com.

The request comes as lawyers representing Gawker Media continue to seek insight into Mr. Thiel’s relationship with Mr. Bollea’s lawyer, Charles J. Harder. In June, a judge granted Gawker Media permission to seek discovery on the issue. Mr. Holden told the Journal earlier this month that he would consider putting any potential legal claims the publisher may hold against Mr. Thiel up for sale.

In a series of emails to Gawker’s lawyer, Mr. Thiel’s legal team said the billionaire financier wanted to buy the website and its potential legal claims, or “causes of action” in legalese.

“Mr. Thiel is prepared to make an offer to acquire all remaining Gawker assets, including Retained Causes of Action as defined in the Plan, but excluding all cash held for distribution under the Plan,” Mr. Thiel’s lawyers wrote in an email to Gregg Galardi, a Ropes & Gray LLP lawyer representing Gawker Media. “Mr. Thiel is highly confident that he can provide more value for the remaining assets than any other bidder in a fair and competitive sale process and, therefore, an expeditious path to the closure of the Gawker bankruptcy cases. Mr. Thiel is prepared to participate immediately and in good faith in such a process. The threatened estate claims against Mr. Thiel are spurious. If necessary, he will litigate them to conclusion, which would be expensive and time-consuming.”

Mr. Galardi responded that Mr. Thiel was free to make an offer for gawker.com, but that given their differing opinions on the value of any potential legal claims against Mr. Thiel, he doubted the two sides could agree on a price.

“We offered that possibility a while back in connection with a settlement of claims and were told Mr. Thiel had no interest because he thought the claims had no value,” Mr. Galardi wrote to Mr. Thiel’s lawyers. “Since you describe the claims as ‘spurious,’ that view has apparently not changed. So, while Mr. Thiel is free to make a proposal, we doubt we can agree on a price.”

On Wednesday, Mr. Thiel’s lawyers requested that the judge vacate his prior order granting discovery in light of the sale process. “Because the plan administrator’s intentions regarding the claims have changed, cause no longer exists and the discovery is moot,” Mr. Thiel’s lawyers said.

Mr. Holden told the Journal that while Gawker Media’s advisers offered Mr. Thiel a chance to submit a bid, they never received one. Generally, Mr. Holden said, that the “buy it now price” for Gawker.com is $36 million because, he said, the most a single site had ever sold for, VacationRentals.com, $35 million.

https://tse3.mm.bing.net/th?id=OIP.MrCWrilx32FCU7iSCl9kSwFrCr&w=235&h=141&c=7&qlt=90&o=4&pid=1.7

Separately, Mr. Holden said Gawker Media’s advisers were concerned that engaging with Mr. Thiel and negotiating a nondisclosure agreement with him would be time consuming and costly. There was also concern that bidding on Gawker Media’s remaining assets would be chilled if people became aware that Mr. Thiel was bidding because of his significant financial resources, Mr. Holden said.

Mr. Holden also said Gawker Media decided to market the potential claims against Mr. Thiel after a conversation with his lawyers.

“The entire idea of selling the claims was something we picked up on when Thiel’s lawyers called to say they wanted to participate in the bidding,” Mr. Holden said. The fact that they were looking into potential claims against Mr. Thiel was another concern, he said.

Mr. Thiel’s lawyers didn’t immediately respond to messages late Wednesday.

Lawyers for Messrs. Harder and Bollea have also objected to discovery. Mr. Bollea is entitled to 45% of the proceeds from a sale of Gawker, according to the $31 million settlement that ended the wrestler’s lawsuit.

Former Gawker writers have previously told the Journal that the website’s archive includes important articles and should be preserved. Univision Communications Inc. last year bought Gawker’s sister sites, among them Jezebel, Deadspin and Gizmodo, out of bankruptcy for $135 million. It passed, however, on purchasing Gawker.

Write to Jonathan Randles at Jonathan.Randles@wsj.com

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