(Reuters) -- Gawker Media LLC, the online publisher ordered by a U.S. court to pay $140 million to former wrestler Hulk Hogan over the publication of a sex tape, filed for Chapter 11 bankruptcy protection on Friday and is planning to put itself up for sale.
The move will intensify public debate in the United States over the role of big money in media lawsuits. Billionaire investor Peter Thiel, an early backer of Facebook (FB.O) and a co-founder of PayPal had bankrolled Hogan's lawsuit.
Hogan, whose real name is Terry Bollea, is listed as the largest creditor in Gawker's bankruptcy filing.
Media company Ziff Davis LLC already has an agreement to buy Gawker for a little less than $100 million, according to people familiar with the matter. However, a bankruptcy auction will ensue, likely at the end of July. If no other bidders step up with better offers, Ziff Davis will become Gawker's new owner, the people said.
"There's a tremendous fit between the two organizations, from brands to audience to monetization," said a spokesman for Ziff Davis. "We look forward to the possibility of adding these great brands -- and the talented people who support them -- to the Ziff Davis family."
In the filing, Gawker said its assets are estimated to be worth $50 million to $100 million, whereas its liabilities are estimated to be between $100 million and $500 million.
"A high bond like that is effectively the same as not allowing the stay," Michael Berry, an attorney for Gawker, told the court hearing. "My client faces financial ruin. The verdict could be overturned or reduced."
In March, a six-person jury awarded $60 million to Hogan, 62, for emotional distress and $55 million for economic damages, after Gawker published in 2012 a 41-second edited video clip featuring him having sex with the wife of his then-best friend, the radio shock jock Bubba the Love Sponge Clem.
The jury then slapped another $25 million in punitive damages on the company and its publisher and Chief Executive Officer Nick Denton.
In order to comply with Florida state law regarding bond for defendants Denton pledged his most meaningful asset, about $800 million worth of stock in Gawker media, according to Berry.
What a beautiful day,and the good doesn't prevent the better! In the present I AM always grateful,only good happens to me. HH— Hulk Hogan (@HulkHogan) June 10, 2016