Hulk Hogan vs. Gawker Aftermath – big court hearing scheduled for Thursday, Hogan claims foul play in pre-bankruptcy arrangement

By James Caldwell, PWTorch assistant editor


Hulk Hogan (artist Travis Beaven © PWTorch)

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Hulk Hogan vs. Gawker Trial Aftermath – July 2016

– The next court hearing in Gawker’s bankruptcy proceedings in New York is scheduled for Thursday afternoon (July 7) with Judge Stuart Bernstein in New York City.

According to the agenda filed with the court on Wednesday, there are 16 items to be discussed. Many of the items are basic legal issues under the category of “matters related to professional retention.”

The majority of the items are related to how Gawker’s creditors will be paid and in what order as the company prepares to be sold in an auction.

There is also an individual item related to the sale. Included is a discussion of Hulk Hogan’s objection to how the bidding will proceed. Hogan believes Gawker is attempting to avoid paying damages through the auction.

– Earlier this week, Hogan’s camp filed a claim alleging that Gawker and founder Nick Denton misled the Florida court and secretly obtained funding to shield Denton from personal bankruptcy.

According to the filing, Hogan is alleging that Gawker or an affiliate paid Denton $200,000 “in the form of a loan for purposes of paying for personal bankruptcy counsel,” which was “concealed from the Florida Court” during pre-bankruptcy hearings.

In Florida court, Denton pledged his Gawker stock as security in exchange for a delay in the $140 million judgment being executed. Per Florida code, Gawker and Denton, who was found personally liable as well as his company, were faced with the possibility of paying $50 million to keep the legal process alive in order to appeal.

“Unbeknownst to [Hogan] and the Florida court at that time, debtor had already signed its bankruptcy petition and voted to sell the assets,” Hogan’s attorneys claimed. “Judgment debtors never advised the Florida court that the bankruptcy filing was imminent.”

Bloomberg added that the alleged $200,000 loan to Denton was made “without forcing him to put up any collateral.”

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Week of June 20 Updates

June 24 Update: Hulk Hogan was appointed the head of the “Official Committee of Unsecured Creditors” in Gawker’s bankruptcy proceedings in New York court.

As first reported by Bloomberg, Hogan is joined by other creditors on the committee seeking payment of damages against Gawker.

The one-page filing with the U.S. Bankruptcy Court in the Southern District of New York noted that Hogan and two other plaintiffs, Shiva Ayyadurai and Ashley A. Terrill, are “willing to serve” on the committee and were approved by U.S. Trustee William Harrington.

– The next court hearing is Monday morning (June 27) at the Bankruptcy Court in New York City.

Judge Stuart Bernstein has scheduled a hearing pertinent to Gawker and all debtors, which includes Hogan.

The two items on the agenda are “Contested Matters – Sale Motion” and “Uncontested Matters – Critical Vendors Motion.”

Concerning the first item, the parties will review Hogan’s camp filing an order challenging Gawker’s auction proceedings.

Concerning the second item, the parties will review Gawker’s motion on June 13 requesting they be allowed to prioritize pre-existing claims from “critical vendors and foreign vendors” that arose prior to the bankruptcy proceedings.

– Also on Friday, Gawker submitted a response to Hogan’s “limited objection” filing on Monday, where Hogan’s camp objected to Gawker’s bidding process during the bankruptcy proceedings.

Gawker’s response is summed as: “The debtors (Gawker) respectfully request that this Court overrule the Limited Objection, grant the relief sought in the Sale Motion, and enter the Bidding Procedures.”

The “sale motion” will be dealt with on Monday with Judge Bernstein, according to the agenda. The specific item is whether the court will authorize the “sale of substantially all of the debtors’s assets free and clear of all claims, liens, rights, interests, and encumbrances.” This relates to what Hogan’s camp objected to, expressing concern about collecting the $140 million debt, pending appeal.

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June 20 Update: Hulk Hogan’s attorneys filed a challenge to Gawker’s auction proceedings, arguing that the potential sale to a publisher such as Ziff Davis could negatively impact Hogan’s ability to collect on a $140 million judgment, reports the Wall Street Journal.

The jury’s ruling, which was upheld by Judge Pamela Campbell in the Florida circuit court, is still pending appeal in the Florida appeals court. However, Hogan’s camp is looking to ensure it will be able to collect the current debt in the event of Gawker being sold when the auction officially takes place in New York bankruptcy later this month.

Back in Florida court, Hogan’s attorneys attached the New York court’s temporary restraining order back to the original lawsuit, Gawker’s original appeal in November 2015, and Gawker’s most-recent appeal on June 10.

The Florida appeals court noted that “this court is prevented from any action in this appeal due to the automatic stay provision of 11 U.S.C., Section 362, Bankruptcy Code, unless a party receives stay relief from the bankruptcy court which at this time has jurisdiction.”

The parties of Hulk Hogan and Gawker have been “directed to inform this court when the bankruptcy court grants relief from the automatic stay or when the stay lapses.” The action is due by October 19.

Essentially, the Florida appeals court is waiting for the bankruptcy court to resolve their aspect of the legal proceedings before reviewing Gawker’s appeals case.

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