NEW YORK (Reuters) - A U.S. bankruptcy judge on Wednesday approved Gawker Media LLC’s request to borrow $22 million from an affiliate of buyout firm Cerberus Capital Management LP to help fund the online publisher through its court-supervised auction.
The gossip news website owner, facing a crippling court ruling to pay $140 million to former professional wrestler Hulk Hogan over the publication of excerpts from a sex tape, needs the money to stay in business as it seeks to sell itself in bankruptcy.
Gawker filed for bankruptcy last week, with an agreement from publisher Ziff Davis LLC to buy it for $90 million setting the floor for future bids in an auction expected to take place later this summer.
Attorneys for both Gawker and Hogan, whose legal name is Terry Bollea, agreed on Wednesday to a standstill in litigation the publisher faces in Florida until July 13.
Billionaire investor Peter Thiel, an early backer of Facebook Inc (FB.O) and PayPal Holdings Inc (PYPL.O), helped fund Hogan’s lawsuit, and several others against Gawker. Gawker posted a 2007 article about Thiel entitled “Peter Thiel is totally gay, people.”
Gawker founder and Chief Executive Nick Denton told CNBC on Wednesday that the $90 million offer from Ziff Davis is “depressed compared to what Business Insider got last year.”
European digital publisher Axel Springer SE (SPRGn.DE) announced it was buying business news website Business Insider for $442 million in September.
In his comments to CNBC, Denton did not rule out buying Gawker himself, “if an acquirer doesn’t value it as say I or other investors would.”
Reporting by Jessica DiNapoli in New York; Editing by Tom Brown