![]() The reasoning is that simply classifying a party as “unimpaired” should not automatically deem such party as having consented to a release. Some courts have found that a plan provision that binds parties to releases where such parties were not entitled to vote on the plan is, in effect, a “non-consensual” third-party release. This includes parties who were unimpaired under and, thus, not entitled to vote on the plan pursuant to Bankruptcy Code section 1126(f). The releasing parties in Gawker’s plan include all parties who receive or are deemed to receive distributions under the plan. The only thing more controversial than a third-party release is a non-consensual third-party release. Those are your releases – third-party releases! The released claims and causes of action are limited to those arising out of or relating to the released employees’ and independent contractors’ work performed or content provided on behalf of Gawker. The released claims and causes of action are held by holders of claims against or equity interests in Gawker who received distributions under the plan ( i.e., not the debtors). ![]() The plan provides for releases of Gawker’s current and former employees and independent contractors who (i) voted to accept the plan, and (ii) waived and released all claims and causes of action against Gawker for indemnification obligations, except for amounts due and owing as of the effective date of the plan. That’s why Gawker’s plan is a treasure trove for us and, no doubt, many bankruptcy scholars and commentators to come. In bankruptcy court, releases are more controversial than a sex tape. The plan also provides for settlements of other defamation lawsuits against Gawker, including a $500,000 settlement with journalist Ashley Terrill, a $750,000 settlement with self-proclaimed inventor of e-mail Shiva Ayyadurai, a $125,000 settlement with former Major League Baseball player Mitch Williams, and a $100,000 settlement with attorney Meanith Huon.Īs entertaining as the celebrity-scandal duo is, that’s not even the most noteworthy component of Gawker’s liquidation plan. Gawker and Hogan ultimately reached a settlement, which was incorporated into the plan, pursuant to which Gawker agreed to pay Hogan $31 million plus a portion of the proceeds from any future sale of the domain to fully and finally resolve Hogan’s lawsuit. The judgment forced both Gawker and its founder into bankruptcy. In March 2016, a jury found Gawker liable and awarded Hogan $115 million in compensatory damages and $25 million in punitive damages. Hogan sued Gawker and several of its employees and affiliates for publishing the video, alleging, among other things, invasion of privacy by intrusion upon seclusion, violation of publicity rights, and intentional and negligent infliction of emotional distress. The easiest way to describe the video is “#NSFW” (not safe for work/Weil). Back in 2012, Gawker published a video starring Hogan. If you don’t know who that is, here’s a hint: Hulkamania is runnin’ wild, Brother (and it did, all over Gawker and its chapter 11 cases)! Terry Bollea = Hulk Hogan. Some would say that the heart of the plan is Gawker’s settlement with Terry Bollea. ![]() ![]() Releases! Just before Christmas, Judge Bernstein of the United States Bankruptcy Court for the Southern District of New York gave his blessing to Gawker’s chapter 11 liquidation plan. The chapter 11 cases of Gawker Media, LLC and its debtor affiliates have given the bankruptcy vultures everything they could ever hope for in one docket– celebrity, scandal, a cameo by the First Amendment, and releases. ![]()
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