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Gawker files for bankruptcy and says it will sell the company to Ziff Davis or someone else

Nick Denton, founder and CEO of Gawker Media.
Katie Kramer | CNBC

Peter Thiel is getting closer to his goal: Gawker Media has filed for bankruptcy protection and says it eventually plans to find a new owner for the company.

Gawker and owner Nick Denton are making the Chapter 11 filing today, in order to avoid paying Thiel and Hulk Hogan the $140 million judgment they won in Hogan's privacy trial earlier this year.

Gawker has told it employees it still plans to fight the Thiel/Hogan case and to operate its publishing business while it does so. But it is also now formally entertaining offers to buy the company and says it has a firm bid from publisher Ziff Davis to buy the entire operation for less than $100 million.

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Gawker and its banker Mark Patricof assume that the company will eventually see higher bids while it is in bankruptcy protection. Last year, in advance of the Hogan trial, Denton figured his company was worth something in the $250 million to $300 million range.

But in any case the company won't trade hands until Gawker either beats back Thiel and Hogan or it finishes a court-approved restructuring. Because no one wants to buy an ongoing lawsuit from Peter Thiel.

Ziff Davis itself is a company that has gone through the Chapter 11 process. The company was once a dominant force in the trade and hobbyist magazine business, but its fortunes declined along with the print industry, and it filed for bankruptcy protection in 2008.

Ziff Davis now operates a tech-centric stable of digital titles, including IGN, AskMen and PCMag, that it says reaches more than 100 million readers a month; the company is run by former Time Inc. exec Vivek Shah.

In theory, Gawker and Denton are in this position because Gawker published excerpts of a 2012 sex tape featuring Hogan and the wife of one of his friends.

But Thiel, a billionaire who made his fortune by running PayPal, then making an early investment in Facebook, has made it clear that he funded Hogan's lawsuit to punish Gawker and Denton for a series of posts the publisher had made over the years.

"It's less about revenge and more about specific deterrence, " Thiel said last month in an interview with the New York Times. "I saw Gawker pioneer a unique and incredibly damaging way of getting attention by bullying people even when there was no connection with the public interest."

Funding Hogan's case, Thiel said, was "one of my greater philanthropic things that I've done."

Denton has refused to apologize for the Hogan post and has argued that Thiel's campaign against him and his company will set a dangerous precedent.

Here's part of Denton's appearance at the Code Conference earlier this month — the empty chair next to him was reserved for Thiel, who was invited to join him onstage but didn't respond to Recode's invitations.

And here's Denton's entire interview with Recode Executive Editor Kara Swisher.

By Peter Kafka, Re/

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