Nick Denton Peter Thiel

Nick Denton, owner of Gawker Media, was bankrupted by billionaire Peter Thiel through a lawsuit filed by Hulk Hogan. The site will soon be sold in an auction. (Photos: Getty)

Peter Thiel, the tech mogul who posed the biggest threat to a free press since the 1950s Red Scare, has officially been defanged by lawyers handling Gawker Media‘s bankruptcy. He won’t be able to sink his teeth into Gawker, or pull the same stunt he used to bring the Web site down.

In a sweeping legal settlement, Thiel and his investment firm, Thiel Capital LLC, agreed to absolve Gawker’s future owner of all legal liability as well as writers who posted articles on the site.

He also agreed to refrain from secretly, or otherwise, funding any legal action against Gawker Media now or in the future.

Significantly, he also dropped out of the running to buy the moribund Web site.

The latest development came yesterday in U.S. Bankruptcy Court in New York. It was first reported by The Wall Street Journal.

You may recall, in 2016, Thiel suddenly emerged from the shadows after The New York Times outed him as the secret financier of a lawsuit against Gawker filed by Terry Bollea, widely known by his stage name Hulk Hogan.

Thiel’s effort amounted to the single biggest example of abuse of process in decades, if not, in the history of U.S. jurisprudence.

He was allegedly seeking revenge for being outed as gay in a 2007 story published by Gawker sister site ValleyWag, which covered Silicon Valley.

Thiel was trying to keep his sexuality secret because he was trying to negotiate a deal for funding in Saudi Arabia, where he would likely be thrown from a rooftop or at least lashed for being gay.

Civil courts are meant to be forums of last resort. They resolve legal grievances that can’t otherwise be resolved amicably between two parties. But Thiel wasn’t interested in resolving a grievance.

Hulk Hogan’s case was weak at best. Gawker published snippets of a “sex tape,” featuring Bollea banging Heather Clem, the wife of his best friend, Todd Clem, a radio personality known as “Bubba the Love Sponge.”

Clem filmed and probably leaked the tape allegedly without Bollea’s knowledge, hoping to cash in like Kim Kardashian, who made millions of dollars off her sex tape.

Bollea asked Gawker to take down the video. When the Web site refused on First Amendment grounds, Bollea sued, seeking $100 million in damages for invasion of privacy.

Normally, such cases of questionable legal merit are eventually settled out of court. But Thiel agreed to bankroll Bollea’s personal and legal expenses to pursue the suit as far as possible. The case had been filed in Bollea’s hometown in Florida, where he is hugely popular.

A Florida jury awarded Bollea $140 million in March 2016. To Thiel, the outcome was immaterial; his goal was to bleed Gawker financially and force the site into bankruptcy.

After the judge refused to grant an appeal–where Gawker Media was confident the judgment would be overturned–the company was forced to file for Chapter 11 bankruptcy.

The billionaire investor had succeeded in bleeding Gawker Media financially, in what The Times described as a “clandestine war” to punish, and ultimately silence the snarky news outlet and its owner Nick Denton.

The Times revealed that Thiel was also secretly funding two other lawsuits against the media outlet.

The co-founder of paypal and early investor in Facebook isn’t the first mogul to use the courts to grind an ax, but he did it on an unprecedented scale that had a chilling effect on the news media, free speech and society as a whole.

If Thiel’s actions go without condemnation, then anyone with deep pockets could easily do the same–no matter what the merits of the legal dispute in question.

In an ironic, ghoulish twist, Thiel emerged from the shadows, again, in an attempt to feast on Gawker’s corpse. Last year, he expressed interest, through his lawyers, to bid on Gawker’s remaining assets, including more than 200,000 articles posted on the Web.

This time, though, the courts were working against him.

A bankruptcy judge ruled earlier this year that Thiel and Charles Harder, the lawyer who represented Bollea, had to answer subpoenas seeking details about the funding of Hogan’s case and others, according to The Journal.

That set the stage for the settlement.

In exchange for Thiel’s legal release, the bankruptcy’s lawyer agreed to end its investigation into Thiel and Harder. Thiel also agreed to not fund any other lawsuit against Gawker.

The deal should clear the way for the auction, ending nearly two years of bankruptcy legal proceedings. At this point, only Gawker remains.

It’s other media properties were sold to Univision for $135 million.