Close up of bankruptcy petition

Gawker.com, a pseudo-news blog, is going to shut down this week. The parent company, Gawker Media, was sued by wrestler Hulk Hogan, and a judge awarded Hogan $140M. This meant that Gawker had to declare bankruptcy. The company was then purchased by Univision, which paid $135M for it, but Gawker.com is going to be closed down by Univision anyway.

Privacy Invasions

The lawsuit filed by Hogan revolved around an invasion of privacy. One of Hogan's friends is a DJ, and a video was leaked to Gawker showing Hogan sleeping with his friend's wife. Gawker not only broke the news but ran the video on their site. That's when Hogan stepped up and sued, with the financial backing of Peter Thiel -- a billionaire from Silicon Valley.

It appears that Gawker was digging its own grave for some time. In 2007, Gawker found out that Thiel was gay, something he had not publicly announced yet. The site then decided to out him to the world, whether he wanted it or not. He likely teamed up with Hogan as a way of striking back at the site, and his actions eventually took it down completely.

Media Rules

Experts have noted that one of the most interesting takeaways from all of this is that the media does still have defined rules it must follow with the information it releases, and it has to operate within the law. Not doing so can be costly, to say the least, and could even lead to bankruptcy. This goes a long way toward defining what the "free press" really looks like and what rules journalists must follow. As one expert noted, reporters can't think of themselves as being above the law, not even in the digital age.

Bankruptcy

This case also shows just how drastic changes can be after a bankruptcy filing. Univision technically bought Gawker Media, which owns Gawker.com and a number of other blogs -- such as Deadspin -- that are still in operation. It's important for those on both sides to know how bankruptcy can bring about these structural changes, what legal steps need to be taken, and how different types of bankruptcy can be used to achieve specific goals.