A Florida judge said Gawker founder Nick Denton “misled” the court about the value of his company — and punished him by ruling that Hulk Hogan could start seizing his assets.
Denton told Judge Pamela Campbell in June that Gawker Media Group, Inc. was worth $276 million.
He didn’t have the cash to post the $50 million bond required to appeal the $140 million verdict awarded to Hogan, so he offered his stock in Gawker instead.
Denton said that his 30 percent stake in Gawker was worth $81 million.
The $81 million figure was “used to give [Hogan] and this court the impression that the stock had significant value,” Campbell says in a decision released Friday.
Based on that representation Campbell agreed to the offer—only to learn later that the stock was worth closer to $30 million.
“Mr Denton…misled this court in connection with [his] pledge of Gawker Media Group, Inc. stock by concealing material information about the value of that stock which a reasonable person, under the circumstances, should have disclosed,” Campbell says in the order.
What Denton did not disclose is that he’d already prepared to file bankruptcy on behalf of Gawker and had pledged to sell the company for just $90 million.
That sale price meant that Denton’s share was worth under $30 million—not the $81 million he cited to the court.
“These are all material facts affecting the value of the stock Mr. Denton and Mr. Daulerio pledged,” Campbell says in the ruling.
“The integrity of the civil litigation process depends on truthful disclosure of facts. Revealing only some of the facts does not constitute truthful disclosure,” she writes.
In Friday’s ruling the judge found that the new, $30 million value of Denton’s stock “is not adequate” for the bond.
So she ruled that Hogan can start collecting on the jury award.
Hogan’s attorney, David Houston, said his client “will do all within his power to enforce his judgment against” Denton.
Denton plans to ask an appeals court for an emergency stay of Judge Campbell’s ruling.
“I have to say that I think the court really got this one wrong,” Denton said. “The $81 million company valuation the court relied on was Hogan’s valuation. We told the court they did not know what the company’s shares would be worth.
“There was no misrepresentation,” he said.