The Wall Street Journal: Gawker abandons potential lawsuit, negotiates truce with Peter Thiel

Advisers liquidating Gawker Media LLC negotiated a truce with Peter Thiel after they were unable to get law firms or litigation financiers to back a potential lawsuit against the billionaire investor, an attorney representing the former blog publisher told a judge Thursday.

Judge Stuart Bernstein of the U.S. Bankruptcy Court in New York said at a hearing he will approve the agreement ultimately reached between Thiel, his firm Thiel Capital LLC and the adviser liquidating Gawker Media. The agreement ends legal wrangling between Gawker Media and Thiel and offers protection to the eventual purchaser of its flagship blog, Gawker.com.

Attorneys for Gawker Media attempted to build a legal case against Thiel over his secret funding of litigation that drove the publisher into bankruptcy in 2016. Ultimately, a lawsuit against the Facebook Inc. board member would have faced significant legal hurdles and been expensive to prosecute, said Gregg Galardi, a bankruptcy lawyer representing Gawker Media.

As part of the new agreement, Thiel will not purchase Gawker.com, which will be sold in bankruptcy. Galardi said Thiel bid on Gawker but that his offer wasn’t the highest or best offer advisers have received for the site and that the billionaire’s involvement chilled interest from other suitors. The blog ceased publishing in 2016 but remains on the web.

An expanded version of this report appears on WSJ.com.

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