Gawker Media can go ahead with plans for an auction after making several changes to satisfy a bankruptcy judge’s concerns that the company hadn’t adequately marketed itself and would give any buyer a windfall if it settles its legal battle with Hulk Hogan, Bloomberg News reported yesterday. “It doesn’t appear the asset was sufficiently marketed,” Bankruptcy Judge Stuart Bernstein said in court yesterday, at first denying Gawker’s planned sale procedure. Judge Bernstein also cited a provision in the plan for “liquidated damages,” which would give leading bidder Ziff Davis $13.5 million if the bankruptcy suit is dismissed. Lawyers for Ziff Davis said the unusual clause was needed in the event the deal fell apart if Gawker settled the case that drove it into bankruptcy — a $140 million judgment in a sex tape suit brought by Hogan. Following the judge’s ruling, the parties reached a new agreement on the plan that put the $13.5 million provision behind claims by Hogan and Gawker’s other unsecured creditors. The company extended the schedule for the sale prior to the hearing. The new deadline for bids is Aug. 15, the auction will be Aug. 16 and a hearing to approve the winning bid will be Aug. 18. The auction was previously scheduled for July 27.
