Gawker Financial Worth Arguments & Exhibits

This PDF includes: 10/9/15 Terry "Hulk Hogan" Bollea's motion to compel additional financial worth discovery (with exhibits) 11/12/15 Gawker opposition to motion to compel additional financial worth discovery (with exhibits) 11/13/15 Notice of Hearing 11/18 Exhibit A: Correspondence To Court Re: Financial Worth Discovery from 06/26/15
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Filing # 33069097 E-Filed 10/09/2015 03:26:04 PM IN THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT IN AND FOR PINELLAS COUNTY, FLORIDA TERRY GENE BOLLEA professionally known as HULK HOGAN, Plaintiff, vs. Case No. 12012447CI-011 HEATHER CLEM; GAWKER MEDIA, LLC aka GAWKER MEDIA; GAWKER MEDIA GROUP, INC. aka GAWKER MEDIA; GAWKER ENTERTAINMENT, LLC; GAWKER TECHNOLOGY, LLC; GAWKER SALES, LLC; NICK DENTON; AJ. DAULERIO; KATE BENNERT, and BLOGWIRE HUNGARY SZELLEMI ALKOTAST HASZNOSITO KFT aka GAWKER MEDIA, Defendants. _____________________________________________ / PLAINTIFF TERRY BOLLEA’S MOTION TO COMPEL COMPLETE PRODUCTION OF DOCUMENTS IN RESPONSE TO FINANCIAL WORTH DISCOVERY AND RECONSIDERATION OF RULING REGARDING ADDITIONAL FINANCIAL WORTH DEPOSITIONS: REQUEST FOR SANCTIONS Plaintiff, Terry Bollea, professionally known as Hulk Hogan (“Mr. Bollea”), pursuant to Fla. R. Civ. P. 1.380, moves to compel Defendants to comply with the Court’s July 20, 2015 Order Regarding Plaintiffs Motion to Compel Further Financial Worth Discovery and Depositions, and for Sanctions for failure to comply with said order, and for reconsideration of the Court’s June 29, 2015 ruling regarding additional financial worth depositions. The grounds upon which this motion is based and the reasons it should be granted are as follows: I. INTRODUCTION On or about April 8, 2015, Terry Bollea filed a motion to add a claim for punitive damages entitling him, upon success of the motion, to financial worth discovery of the1 1 * * *ELECTRONIC ALLY FILED 10/09/2015 03:26:05 PM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY*** Defendants. Aware of this, on April 22, 2015, Gawker proposed a streamlined discovery process to which the Court agreed. Ex. I.1 On May 29, 2015, this Court granted Terry Bollea’s motion to add a claim for punitive damages and denied the motion of Gawker Media, LLC (“Gawker”) and the two individual defendants (collectively “Gawker Defendants”) for summary judgment on that claim. Ex. 2. Accordingly, the Court also granted Mr. Bollea’s request for discovery of Gawker Defendants’ respective net worths. Ex. 3. After Gawker Defendants failed to produce relevant and responsive documents, Mr. Bollea moved to compel, and the motion was granted in part on July 20, 2015, with Gawker Defendants ordered to produce additional documents. Ex. 4; Ex. 5. Gawker Defendants, as they have so many times during this litigation, have again obstructed legitimate discovery and failed to produce responsive documents required under the Court’s July 20, 2015 order. The omitted items include the following: The Transfer Pricing Study. The Court ordered Gawker Defendants to produce the governing documents and intercompany agreements between Gawker, Kinja and Gawker Media Group, Inc. When the Gawker Defendants produced a licensing agreement, it revealed that the fee used to transfer all of Gawker’s profits to Kinja is calculated pursuant to a transfer pricing study. Gawker Defendants refuse to produce this economic analysis / transfer pricing study that they performed to determine the license fee that Gawker pays to Kinja, the Hungarian sister company which purports to own the intellectual property utilized by Gawker to generate its millions of dollars in annual profits. Pursuant to its license, Gawker pays millions of dollars to Kinja every year, which substantially affects its net worth. Thus, Mr. Bollea is entitled to determine how the fee Gawker is paying Kinja is calculated and whether it actually corresponds to their actual value or is a sham to reduce Gawker’s net worth.12 1Unless otherwise noted, exhibits are to the concurrently filed Affidavit of Charles J. Harder. 2 The recent revelation that this transfer pricing study exists should result in sanctions. This study was requested over and over again in discovery, and Gawker Defendants deliberately concealed it. A 2014 discovery request specifically requested transfer pricing studies, and Gawker responded that no non-privileged documents exist. Gawker Defendants purposely mischaracterized the document on their privilege log, claiming it was lawyer-client privileged, by describing it generically as “economic analysis,” not a “transfer pricing study.” Ex. 6. Such gamesmanship should not be permitted and should be severely sanctioned. In response to the net worth discovery, and after several letters back and forth, Gawker Defendants still maintain the transfer pricing study is protected by the lawyer-client privilege. Ex. 7. It is not. The document apparently was transmitted by or contains the name of a law firm (Mayer Brown). However, it is black-letter law that the lawyer-client privilege extends only to communications for the purpose of rendering legal advice, and that simply putting a lawyer’s name on an “economic analysis” of the valuation of intellectual property does not render the communication privileged. The transfer pricing study cannot be routed through a law firm so as to create a bogus claim of privilege; law firms do not value intellectual property assets, and even if Mayer Brown did value one for a client, the valuation itself would not be privileged because it is not legal advice. The Court should order production and sanction Gawker Defendants. The Trust Documents. In the July 20, 2015 Order, the Court directed Nick Denton (“Denton”) and Gawker to produce his irrevocable family trust documents. Ex. 5. This trust purportedly owns a significant percentage of the stock of Gawker Media Group, Inc. (“GMGI”). The Court ordered production of these documents for a very simple reason—Denton owns a plurality of shares in GMGI which, when added to the shares of GMGI, constitutes a majority. Denton thus controls the company, and shares that control the company are more valuable3 3 (known as the “control premium”). Denton and Gawker refuse to produce the trust documents, claiming that they don’t possess them. Ex. 7. Florida law is clear that “custody, control or possession” includes “not only... possession, but... the legal right to obtain the documents requested upon demand.” Saewitz v. Saewitz, 79 So.3d 831, 834 (Fla. 3d DCA 2012). Gawker and Denton have the legal right to obtain a copy of the trust documents, but refuse to do so. Both Mr. Denton and Gawker can straightforwardly obtain them from their lawyers or from the trust (Denton’s family members).Denton has provided no evidence that he has even tried, let alone cannot obtain, the documents at his direction if he wished to. The idea that the CEO and plurality shareholder of a company cannot obtain information about his own family’s trust which owns other shares of the company is not worthy of belief, and constitutes the latest attempt by Gawker Defendants to hide the truth in this litigation. Gawker Defendants should be compelled to produce the documents. Sanctions. Gawker Defendants have now forced Mr. Bollea to bring two motions to compel relating to net worth discovery which should have been turned over months ago, and are asserting transparently meritless objections. Gawker Defendants should be required to pay Judge Case’s fees for this motion and to pay Mr. Bollea’s attorney’s fees in the amount of $11,485. II. THE TRANSFER PRICING STUDY SHOULD BE PRODUCED. It is undisputed that Kinja, KFT, a Hungarian sister corporation to Gawker Media, LLC and subsidiary of Gawker Media Group, Inc., licenses intellectual property rights to Gawker Media, LLC and is paid millions of dollars per year for those rights. If these rights are priced based on their actual value, similar to an arms-length transaction with any IP licensor, that would be one thing, but if they are overpriced, as Mr. Bollea strongly suspects, this scheme would permit Gawker Media, LLC to artificially reduce its net worth.4 4 The Gawker-Kinja license agreement expressly states that the license fee is based on a transfer pricing study contained in a document bearing the name of the Mayer Brown law firm. Ex. A Conf. Aff. C. Harder. Mr. Bollea previously requested this study, and Gawker Media, LLC responded that no non-privileged documents exist. As part of a large privilege log that they produced, Gawker Defendants listed the document, but misleadingly described it as an “economic analysis” in order to conceal it and prevent its discovery. Ex. 6. After several meet and confer letters, Gawker Defendants expressly stated that they were claiming that the transfer pricing study—the valuation of the intellectual property rights that Gawker Media, LLC licenses from Kinja, KFT and pays millions of dollars for—is protected by the lawyer-client privilege. Ex. 7. Gawker Defendants’ position is completely contrary to Florida law. Florida law provides that a precondition to the assertion of the lawyer-client privilege is the provision of legal advice, a doctrine that is specifically conceived to prevent what Gawker Defendants are doing here: cloaking non-legal advice in the privilege by routing it through a law firm. “[W]here a lawyer is engaged to advise a person as to business matters as opposed to legal matters, or when he is employed to act simply as an agent to perform some non-legal activity for a client the authorities uniformly hold there is no privilege." Skorman v. Hovnanian, 382 So.2d 1376, 1378 (Fla. 4th DCA 1980) (emphasis added). A persuasive federal case holds that this rule applies to law firms providing asset valuations. In re Asousa Partnership, 2005 WL 3299823 (E.D. Pa. Nov. 17), involved a discovery request for e-mails concerning an appraisal of a company’s assets. The appraisal was routed through a law firm to create a privilege claim. The Court rejected the privilege claim: “Even assuming communications from Liegel fall within any attorney-client privilege between H 5 & W and Smithfield, the subject of these e-mails is an appraisal of Pennexx assets by Valuation Research. While Liegel states that H & W is the ‘party engaging [Valuation Research's] services,’ other e-mails make it abundantly clear that this was a ‘ghost-hiring’ on Smithfield's behalf to create the appearance of attorney-client privilege over the appraisal, as was H & W's subsequent receipt and ‘laying of hands’ upon the report.... Liegel's communication with H & W is not for the purpose of Smithfield securing legal advice/services, and the privilege does not attach.” Asousa Partnership is directly on point here. Mayer Brown is a major law firm and is in the business of providing legal advice, not asset valuations. In addition, even if it did provide an asset valuation, it would not be protected by the lawyer-client privilege because it would not constitute legal advice. It is clear that having the transfer pricing analysis “originate” from Mayer Brown was a “ghost hiring” for no other purpose than to create a phony privilege claim. Gawker Defendants should therefore be compelled to produce all transfer pricing studies. III. THE TRUST DOCUMENTS SHOULD BE PRODUCED. On July 20, 2015, the Court ordered Gawker Defendants to produce documents responsive to Mr. Bollea’s request for discovery of “Denton’s irrevocable family trust documents”. Ex. 5. The request on which the Court entered its order compelling production read as follows: “Mr. Bollea is entitled to documents sufficient to show the ownership interests and voting rights of the trust that owns certain shares of GMGI, as well as the consideration paid for such shares, the date of creation of the trust, and the date that the shares of GMGI were deposited into the trust. These documents are necessary to value Denton’s ownership interest in GMGI.” Ex. 4. Importantly, the shares in the trust were originally owned by Mr. Denton and were 6 transferred by him into the trust, which ostensibly benefits his own close family members. Ex. B Conf. Aff. C. Harder (Denton Tr.) (“Q. And were you the grantor of those shares. A. They were originally my shares, yes.” {id. at 152:14-17); “Q. Who were the beneficiaries of the trust. A. My niece and two nephews.” {id. at 153:20-22); “Q. Who is the trustee. A. My sister.” {id.at 154:6-7)). While Denton denies having any control over the trust, he could not recall any instance of his sister voting the trust’s shares. {Id. at 155:23-156:8.) Further, despite Denton’s denials of control, at least two media articles profiling him, written by reporters who interviewed him for the articles, have quoted or paraphrased him as saying that he has majority ownership and control of Gawker through his shares and the shares controlled by the family trust. Ex. 8 (Lloyd Grove, The Gospel According to Nick Denton- What Next for the Gawker Founder, The Daily Beast (Dec. 14, 2014): “Personally and through a family trust, Denton says he owns 68 percent of his privately-held, Cayman Islands-registered company.”); Ex. 9 (Allyson Shontell, Gawker Media Generated $45 Million in Net Revenue Last Year And I t ’s Raising a $15 Million Round o f Debt, Business Insider (Jan. 28, 2015): “Through a family trust, Denton owns 68% of the company. He says insiders own 90% of Gawker Media.”). Mr. Denton claimed in his deposition that he was misquoted by these two separate reporters in these two separate publications. This claim is not worthy of belief—it is clear that Denton was telling reporters he had a controlling interest in the company because the family trust is just a mechanism by which he does, indeed, hold such control. Gawker Defendants have flatly disobeyed this Court’s order, asserting that neither Denton nor Gawker Media, LLC has “control” over trust documents. This argument is based on an overly-narrow conception of “control.” Whether documents are within a party’s control “is broadly construed” and includes whether the party has the “right, authority, or practical ability to7 7 obtain the materials sought on demand.” Saewitz, 79 So.3d at 834; see also Costa v. Kerzner Intern. Resorts, Inc., 277 F.R.D. 468, 470—71 (S.D. Fla. 2011). Gawker Defendants have provided no evidence whatsoever that Denton or Gawker lack the practical ability to obtain Denton’s family trust documents on demand. In fact, Mr. Denton admitted at his deposition that he could obtain information about the trust. (“Q.... Because I don’t have an understanding of when the trust was created or when the... family actually acquired ownership in the shares through the trust..., we don’t have that information. You have access to that information; is that correct? A. I can get that information, yes.”) (Ex. B Conf. Aff. C. Harder (Denton Tr. at 158:7-15), emphasis added). There is no doubt that the family trust documents are of crucial relevance to the issue of Denton’s net worth. Denton owns a plurality of the shares in GMGI; if his shares are added to those purportedly owned by his family, he owns a majority. Thus, the trust documents will show whether Denton truly controls those shares and whether his GMGI shares are subject to a control premium and thus worth more. IV. A MONETARY SANCTION SHOULD ALSO BE ASSESSED AGAINST GAWKER DEFENDANTS. Gawker Defendants are simply obstructing discovery. First, they buried the transfer pricing study with a misleading designation in a lengthy privilege log. Now, they have made clear that they are claiming that a study valuing intellectual property assets was somehow “legal advice” because it was routed through a law office. Further, Gawker Defendants are claiming that Gawker and Denton cannot obtain trust documents that they were already ordered to produce and can clearly obtain if they wished to. Accordingly, Gawker Defendants are engaged in a transparent effort to prevent legitimate discovery, and as a result, Mr. Bollea has once again been forced to file a motion to obtain discovery that should have already been produced, in order 8 to defeat meritless make-work objections. This is the continuation of a three year long pattern and practice of obstruction of legitimate discovery by Gawker Defendnats. Mr. Bollea therefore respectfully requests that Gawker Defendants be required to bear the fees of the Special Discovery Magistrate in this matter, and that Gawker Defendants pay a monetary sanction of $11,485 to Mr. Bollea to reimburse Mr. Bollea for attorney’s fees which would never have been incurred but for Gawker Defendants’ obstruction. V. ADDITIONAL NET WORTH DEPOSITIONS On June 29, 2015, the Court denied Mr. Bollea’s request to conduct follow-up financial worth depositions. At that time, the parties were a few days away from commencing the trial which appeared to be the reason for the Court’s denial of this request. Now that the trial has been continued, this timing factor is no longer a concern. Mr. Bollea discovered a number of significant facts through the discovery ordered on July 20, 2015, and should be permitted brief additional examinations of Gawker Defendants to address these newly discovered facts, as well as obtain updated financial worth information from defendants. Gawker Defendants produced some of the most significant documents regarding net worth after their depositions. Mr. Bollea should be permitted an opportunity to follow-up on these developments. VI. CONCLUSION For the foregoing reasons, the Special Discovery Magistrate should recommend that Gawker Defendants be ordered to produce all transfer pricing studies relating to the rights fees paid to Kinja, KFT for intellectual property licenses, and documents sufficient to show the ownership interests and voting rights of Denton’s family trust, as well as the consideration paid for shares in GMGI, the date of creation of the trust, and the date that the shares were deposited 9 into the trust. Gawker Defendants should further be sanctioned in the amount of $11,485 and required to bear the costs of the Special Discovery Magistrate in hearing and determining this motion. Finally, Mr. Bollea should be permitted to conduct follow-up depositions of Gawker Media, LLC and Nick Denton, questioning them about any documents produced after the previous depositions, and any related matters. Dated: October 9, 2015 Respectfully submitted, /s/ Kenneth G. Turkel_________________________ Kenneth G. Turkel, Esq. Florida Bar No. 867233 Shane B. Vogt Florida Bar No. 0257620 BAJO | CUVA | COHEN | TURKEL 100 North Tampa Street, Suite 1900 Tampa, Florida 33602 Tel: (813)443-2199 Fax: (813) 443-2193 Email: [email protected] Email: svo»[email protected] -andCharles J. Harder, Esq. PHVNo. 102333 Douglas E. Mirell, Esq. PHVNo. 109885 Jennifer J. McGrath, Esq. PHVNo. 114890 HARDER MIRELL & ABRAMS LLP 132 South Rodeo Drive, Suite 301 Beverly Hills, CA 90212-2406 Tel: (424) 203-1600 Fax:(424)203-1601 Email: [email protected] Email: [email protected] Email: [email protected]m 10 r rED mj rl jtm a .tjlt jc tl Number of Pages:______Signer(s) Other Than Named A bove:________________________ ____________ ©2014 National Notary Association • www.NationalNotary.org • 1-800-US NOTARY (1-800-876-6827) Item #5910 Filing # 33069097 E-Filed 10/09/2015 03:26:04 PM Exhibit 1 * * *ELECTRONICALLY FILED 10/09/2015 03:26:05 PM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY*** 1 IN THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT OF THE STATE OF FLORIDA, IN AND FOR PINELLAS COUNTY TERRY GENE BOLLEA, professionally known as HULK HOGAN, Plaintiff, No. 12-012447-CI-011 vs. HEATHER CLEM; GAWKER MEDIA, LLC, aka GAWKER MEDIA, et al., Defendants. ---------------/ HEARING BEFORE THE HONORABLE PAMELA CAMPBELL DATE: April 22, 2015 TIME: 1:30 p.m. to 4:03 p.m. PLACE: Pinellas Count Courthouse 545 First Avenue North Courtroom C St. Petersburg, Florida REPORTED BY: Susan C. Riesdorph, RPR, CRR Notary Public, State of Florida Pages 1 - 113 Riesdorph Reporting Group, Inc. (813) 222-8963 _____________________________________________________________________ 51 1 already been placed before Judge Case? 2 MR. TURKEL: 3 jurisdictional stuff? 4 MR. HARDER: 5 6 7 8 9 Did we ever tee up the No, we did not, because they went up to the court of appeal with the issue. THE COURT: What about the financial issues, financial net worth issues? MR. TURKEL: I'll let Charles speak to that. I think they've litigated some of those on 10 financial worth. 11 MR. HARDER: Well, we've done some discovery 12 of financial, but it wasn't in conjunction with 13 punitive damages. 14 15 If I could just ask Ken, because it's a procedural issue. 16 THE COURT: 17 MR. BERLIN: 18 19 Sure. I have a suggestion which may be helpful. MR. HARDER: Your Honor, we -- based upon 20 Your Honor's orders, we received financial 21 information up until December 31, 2013, but we 22 were cut off of 2014 and 2015. 23 gotten that. So we haven't 24 MR. BERLIN: That's not right. 25 MR. HARDER: You even redacted out all the Riesdorph Reporting Group, Inc. (813) 222-8963 ________________________________________________________________52 1 2014 information out of your documents based on 2 the last order. 3 MR. BERLIN: No. That's actually not right. 4 Young American Capital -- remember this debt? 5 Mr. Lester was on the phone. 6 '14 because you had asked for 2011 through 2013. 7 We have produced financial data from 2014. 8 9 10 They redacted out But let me -- can I make a suggestion which I think might be helpful? We're now -- we're apart approximately two weeks between the week of the 12th of May and the 29th of May, two weeks give or 12 take a couple of days. 13 hey, if we do it later, we might not have time to 14 get all the financial discovery done. 15 would -- and to resolve objections about it. 16 A reasonable concern is, What I What I would propose that we do is to do the 17 29th. 18 Mr. Turkel and Mr. Houston to serve the financial 19 discovery that they would like, require us to tell 20 them if this is preempted, here's what we would -- 21 you know, if we have any objections, here's what 22 our objections are. 23 there's a -- you know, we have 20 minutes, we can 24 take it up, do this, don't do this. 25 even schedule -- I don't know what other But why don't we ask Mr. Harder and At the end of the hearing, if And we can Riesdorph Reporting Group, Inc. (813) 222-8963 _____________________________________________________ 53 1 depositions they want. 2 depositions for like early June, we can block out 3 the time so that if the discovery needs to go 4 forward, we can go forward and we have the stuff 5 ready to go so that there you have done several 6 things. 7 getting the discovery done. 8 streamlined the process of getting summary 9 judgment and the motion to amend heard together. If they want to schedule One is you've streamlined the process of Two is you've 10 And you can do that. 11 that would be a reasonable way to go. 12 THE COURT: It would seem to me that So in some ways the motion to 13 extend discovery deadline and shorten the response 14 deadlines for limited purpose of financial worth 15 discovery, it sounds to me, Mr. Berlin, that 16 you're suggesting go ahead and serve it now and 17 then we can rule -- the Court can rule on any 18 objections or anything else if I grant the motion 19 to amend to add punitive -- 20 21 22 23 24 25 Riesdorph Reporting Group, Inc. (813) 222-8963 54 1 Ei..:. m e or." y t..h i no war. Led La s a y was w'rcr 2 3 4 probm_v would have fi.ed a notion because we 5 d i c r . r a v e Lino in rho "ast. two wools :.o dca' 6 1 ..1:. .... ..d 1.11 11 O. ■1 '..'.1 ..iT. .. " " I 7 8 9 10 where we would have beer, asking for more tine. 11 B1..::... wo a s s u r o d :..h, a :. '. a wy c. r s c o o p o r a :.. i r c w : Lr o a c. in 12 or.her wou _d:i't have m n n e d e a r n o t h e r or. t h e 13 14 15 16 :his j u s t 17 :.h' .s wasn't. -- nobody is being surprised today 18 that m i s is our position. this way. .girt? 'We would propose We acrua__y wrote and 19 20 21 c;£ ' o 7 p 22 objection. 23 r \\!o oh j p c . Ar o t " i t 13 wlv--' wo I 1~c n t no I f th ey baa agreed, i " od o b ■o c t i o n s . Wo w o l . d h a v e we w o v _ d r ' t n a v e lust agreed 24 25 Riesdorph Reporting Group, Inc. (813) 222-8963 -- 55 1 MK. B~?.7,TM: T1hat's correct 2 3 4 the o-.ite, oecaine if we do tnis the way they say, 5 when wc a s k Mi ck non;, or. 6 : no : v i do a 1 1 y : o r h '. 3 r.u _ 've a.'-t-rea nary 7 8 9 10 hopper: is ne'e qoir.q to onbect to ai_ of it. ile ’ 11 not coirq to toll us how n..ch money ho has or 12 where it. is. We're qoir.q to nave to ao a _ot. of 16 request: going to say to everybody, ropefn. 17 no:, sru,q'. y but., with an air of civil i:.y arc 18 professionalism, i .cr.evj this wan going to nappen. 13 14 15 19 20 21 M- r--]vy ['('•nn fb•1 I »-. * I C: 22 these tcinqs are proposed, and they :-:our:d very 23 good :r. concept. T-ut ~ have never' served 24 25 Riesdorph Reporting Group, Inc. (813) 222-8963 56 1 w h e r e h e 6 i d no;., horn a r e haw a b o u t e v e r y s i nq' 2 3 4 w e ' r e qoir.q t o p l a y 5 him 6 whan n i s it n e e r i q n t wa y, f o r h '. 3 b a n k a c c o u r.;. s a s o f -iqaid n e t wort.;: i s today when _ a s k t h a t . show and where h i s stocks 7 8 9 10 objection? 11 this 12 case ilii. in a t's is :r.y c o n c e r n . The h i s t o r y of t h e y ' r e go i nq t.o s a y o b j e c t i o n . sls._,lN: When we w r o t e t h e letter _ yist 13 14 15 16 motion ana it's ; 17 be e a r se 18 Claw i t e r a n d 1 s p e n d a l o t . o f t i m e d e a _ i r : q w i t s , t n e required, T have c l i e n t s . b e f o r e we a i a One of m at t h e o', ier. t. s —■ is 19 20 21 v ~ c r t o~ .0 n v v ' m — r o ' 22 significant 23 company, o wn e r " qaess of the t ■■,o p-^ j o :"i ■ company - - T shot'. o s a y . owrc f r-. i I or tne p aren t And wo con. f a c f e d 24 25 Riesdorph Reporting Group, Inc. (813) 222-8963 57 1 2 3 4 5 6 THE COURT: 7 MR. BERLIN: 8 THE COURT: 9 10 So let me ask this. Yes. Have you all reserved any time on Judge Case's calendar for like that week of June 1st? MR. BERLIN: 11 Not yet. He has not been coming 12 to all of the depositions. 13 in my judgment, if he were -- if we were going to 14 have a deposition where they were going to come 15 and ask Mr. Denton or Mr. Delaurio about their net 16 worth, I'm not sure we would all need Judge Case 17 for that, but we can talk about that after the 18 hearing and, if so, reserve some time. 19 So -- and personally We did get an e-mail yesterday from Janice, 20 who is his wife and assistant, saying that he has 21 a number of days before he leaves to go out to 22 Montana. I don't remember the exact date. 23 MR. HARDER: 17th. 24 MR. BERLIN: I think it was something like 25 that. But we should have time -- if we need him. Riesdorph Reporting Group, Inc. (813) 222-8963 58 1 we should have time to do it. 2 exactly the kind of thing we ought to be 3 coordinating now. 4 THE COURT: 5 MR. BERLIN: 6 THE COURT: And I think that's Yes, because July 6th is on us. Right. That's my hesitation of loading 7 up May 29th. 8 we can, I'd like to use those days wisely. 9 can't, we can't. I have a few days available and, if If we But I guess my concern is we're 10 loading up May 29th with too much and there's 11 going to be lots of complaints and everybody is 12 going to whine, I can't get this all done. 13 I'm going to have to say, I'm sorry. 14 you -- tried to give you some days earlier in May 15 to get all this done. 16 MR. BERLIN: And I gave I completely understand what I'm 17 proposing, Your Honor. 18 make this abundantly clear. 19 transcribed by Susan here. 20 asking for the other two weeks what we're getting 21 for that is that we can collapse the inquiry on 22 summary judgment into one hearing and that what 23 we're giving on that is that -- because we have to 24 have some give -- is if there's financial 25 discovery, doing it, getting it ready, teed up, We understand. I want to It's being And we understand by Riesdorph Reporting Group, Inc. (813) 222-8963 ________________________________________________________________59 1 and having it ready to go and doing it quickly. 2 That's -- we made that proposal when we first 3 wrote to them about this, and we understand. 4 MR. TURKEL: There is no if. Judge. When you 5 get a claim for punitives, you get net worth 6 discovery. 7 The law is extremely clear on that. THE COURT: Yes, but there's time frames. 8 You would have to give them reasonable time 9 frames. You want it to be in May. He's saying if 10 we give up giving it — 11 early in May to resolve that, we'll expedite and 12 shorten -- he's agreeing to your -- shortening 13 your response deadline for financial worth 14 discovery. if we cannot come back 15 MR. BERLIN: 16 adjudicate that. 17 motion that's granted. 18 granted, they won't need the discovery. 19 all we're saying. 20 THE COURT: If, Your Honor, was to That assumes that there's a If the motion is not That's But you're sort of waiving it at 21 this point in time if they're going to go ahead 22 and start serving it before the 29th. 23 24 25 Riesdorph Reporting Group, Inc. (813) 222-8963 60 1 we hri v c t . r . o t..o r e s o l v e o b j e c t , i o n s — wh 2 3 4 de 5 ivor:.h 6 re q u e s t si cj r: a t We e f i :la :l c i a _ d is c o v e ry to nave s e r v e oui f i n . and w e 'll t rade th e m o tio n to th a t le a v e fo r to t.b.cr am end nea' 7 8 9 10 wh.ut t n e y ' r e 11 agreeing to is allowing 1.3 lc s 12 wo i t h . a i s c o v e r y t h a t wou_ci b e r e l e v a r i : agreeing to. And w h a t t h e y ' r e m 13 14 15 16 the Court. 17 p r o c c d i.. r a 1 p r o b l err. v; I tin p u t t i nq t h e h e a r i n g 18 That's, MR. Bi i i f i j l d: fine. dmcje, 1 n a t s o l v e s my just of ; s o v; e' r e ( t e a r , i 19 20 21 j c; ; ]-■n | j I"O O : ^riO 22 have t n e o b j e c t i o n s 23 wo h a v e wo s e r v e serveu -- ’"lOW £pO t .r: t any o b j e c t i o n s in a d v a n c e s o t h a t t h e y can 24 25 Riesdorph Reporting Group, Inc. (813) 222-8963 wo1 tnat 61 1 wo -..her: I : ' o 1 h o s u b s o n r . i . i vc - o s p o n s o s a n d wo 2 3 4 qo. 5 Wo h a v e a".", 6 motion, tney get i t . 16 resolve their. on t h e 17 29th, 18 no t h a t A__ o f t h e d o c u m e n t s a r e t.hat ready o qo. ready to prounce. Yo;j g r a n t _f v e t don't, g r a n t t.hc it, 7 8 9 10 11 12 13 14 15 bwt. h e ' s going 2 9t n , we r e s o l v e to have a l l o n J u n e 1 st. o r 2r. u, that t h e n on t r i e staff ready- he';-: g o i n g t o - - if 19 20 21 22 MR. TURKEL: I want him to bring them to the 23 hearing on the 29th. 24 Judge? 25 MR. BERLIN: Is that asking for too much. In all seriousness, Riesdorph Reporting Group, Inc. (813) 222-8963 62 1 2 3 4 Your Honor THE COURT: MR. TURKEL: Judge. 6 each other. She and I are peas and carrots. We're fine. MR. BERLIN: We're five minutes away from Your Honor, the 29th is a 8 Friday. 9 week ought to be sufficient. 10 11 She's going to have to carry all this stuff. 5 7 Poor Ms. Fugate. I think the first couple days of the next MR. TURKEL: How about by Tuesday of the next week, can I put that in the order? 12 13 14 15 16 17 18 19 20 21 22 23 24 25 have them on his calendar. MR. TURKEL: That does it. Riesdorph Reporting Group, Inc. (813) 222-8963 63 1 2 MR. BERLIN: sense. 3 4 I think that makes a lot more I can live with this. MR. HARDER: Your Honor, I guess my — my only question. Your Honor -- 5 THE COURT: 6 MR. BERLIN: Just a second. Did you finish? We were just making sure we have 7 Mr. Denton's deposition availability, but there's 8 a few days where his father is having a birthday 9 in Hungary or -- 10 11 THE COURT: Maybe you can have depositions over there. 12 MR. TURKEL: 13 Budapest, Judge. 14 It's a beautiful time in MS. DIETRICK: I'm not sure what his 15 commitment is, but there are a few days in the 16 first few weeks of June that we can get this done. MR. BERLIN: 17 We think in the first couple 18 weeks, there are enough dates that we ought to be 19 able to schedule that without a problem. 20 THE COURT: 21 MR. HARDER: Great. My only question, Your Honor, 22 was that if all the objections are ruled on on the 23 29th, what do we need Judge Case for? THE COURT: 24 25 time. Just in case we don't have enough Mr. Berlin is suggesting 20 minutes is Riesdorph Reporting Group, Inc. (813) 222-8963 ________________________________________________________________ 64 1 2 3 4 5 6 7 8 9 enough for all the objections. MR. HARDER: I don't know. It takes us 20 minutes to set a date. MR. TURKEL: It takes us 20 minutes to introduce ourselves in this case. MR. BERLIN: I'm eternally optimistic. Your Honor. THE COURT: Let me just say this. that part is resolved. Mr. Turkel is going to 10 work on what that order is going to say. 11 going to send it to me pretty promptly. 12 MR. TURKEL: 13 THE COURT: I think He's Yes, Judge. A couple things. On the motion 14 for summary judgment, please -- you're going to 15 send me a notebook, right, with all the 16 attachments and your case law? 17 punitive damages, if you have case law that you 18 you're also relying on, if you can send me the 19 case law as well so that I can cite the case law. 20 MR. BERLIN: Also, on the We'll send you our binders in 21 the next day or so. 22 between the filing on Monday and coming here 23 today. 24 25 THE COURT: one binder. We just didn't get to it I understand. I just have this I was feeling a little lonely for Riesdorph Reporting Group, Inc. (813) 222-8963 Filing # 33069097 E-Filed 10/09/2015 03:26:04 PM Exhibit 2 * * *ELECTRONICALLY FILED 10/09/2015 03:26:05 PM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY*** IN THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT IN AND FOR PINELLAS COUNTY, FLORIDA TERRY GENE BOLLEA professionally known as HULK HOGAN, Case No. 12012447-CI-011 Plaintiff, v. HEATHER CLEM; GAWKER MEDIA, LLC; et al., ORDER GRANTING PLAINTIFF’S MOTION FOR LEAVE TO AMEND TO ADD CLAIM FOR PUNITIVE DAMAGES AND DENYING GAWKER DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT ON PUNITIVE DAMAGES THIS CAUSE came before the Court on May 29, 2015 upon Plaintiff Terry Gene Bollea’s, professionally known as Hulk Hogan (“Mr. Bollea”), Motion for Leave to Amend to Add Claims for Punitive Damages dated April 3, 2015 (the “Plaintiffs Motion”); as well as Defendants Gawker Media, LLC’s, Nick Denton’s, and A.J. Daulerio’s (collectively, “Gawker Defendants”), Motion for Summary Judgment on Punitive Damages, dated May 8, 2015 (the “Gawker Defendants’ Motion”). The Court reviewed and considered Plaintiffs Motion and exhibits thereto; the Gawker Defendants’ Combined Brief on Punitive Damages, dated May 8, 2015; the Gawker Defendants' Statement of Undisputed Materials Facts on Punitive Damages, dated May 8, 2015, the Affidavit of Alia L. Smith and exhibits thereto, dated May 8, 2015; Plaintiffs Combined Opposition to Motion for Summary Judgment on Proposed Claim for Punitive Damages and Reply in Support of Leave to Add Claim for Punitive Damages, dated May 22, 2015; the Affidavit of Kenneth G. Turkel and exhibits thereto, dated May 22, 2015; the Reply in Support of the Gawker 1 Defendants’ Motion for Summary Judgment on Punitive Damages, dated May 27, 2015. The Court also considered the Court file, and heard argument of counsel, and is otherwise fully advised. Accordingly, the Court FINDS: (1) Pursuant to section 768.72, Florida Statutes, Mr. Bollea seeks leave of Court to add claims for punitive damages against Gawker Defendants by interlineation to his First Amended Complaint. (2) Mr. Bollea filed his Motion for Leave to Add a Claim for Punitive Damages on April 3, 2015. In support, on April 3, 2015, Mr. Bollea filed 42 exhibits, including deposition testimony, responses to requests for admissions, and other documentary evidence. (3) On May 8, 2105, Gawker Defendants filed their Motion for Summary Judgment on Mr. Bollea’s Proposed Claim for Punitive Damages, as well as a Combined Brief on Punitive Damages and a Statement of Undisputed Material Facts on Punitive Damages. (4) Pursuant to Rule 1.190(f), Fla. R. Civ. P., the hearing on Mr. Bollea’s Motion for Leave to Add Claim for Punitive Damages was held more than twenty (20) days after Mr. Bollea’s Motion for Leave to Amend to Assert a claim for Punitive Damages and supporting evidence were filed and served. (5) In order to add a claim for punitive damages, Mr. Bollea must make a “reasonable showing” through evidence in the record or proffered that would provide a “reasonable basis” for recovery of such damages. See Fla. Stat. §768.72(1). (6) On April 3, 2015, Mr. Bollea filed evidence in the record, which this Court has carefully reviewed, which establishes a reasonable basis for the recovery of punitive damages against Gawker Defendants. 2 (7) Mr. Bollea made a reasonable showing by evidence in the record or proffered, to establish a reasonable basis upon which a reasonable jury could find clearly and convincingly that punitive damages are warranted in this case. It is thereupon, ORDERED and ADJUDGED that: (1) Mr. Bollea’s Motion for Leave to Add a Claim for Punitive Damages is GRANTED. (2) Mr. Bollea may re-file his First Amended Complaint containing a claim for punitive damages through interlineation in the Prayer for Relief. (3) No further pleading by Defendants in response to plaintiffs Amended Complaint, as amended by interlineation, is required, and Gawker Defendants are deemed to have denied Mr. Bollea’s claim for punitive damages. (4) The Gawker Defendants’ Motion for Summary Judgment on Punitive Damages is DENIED. Copies furnished to: Counsel of Record 3 Filing # 33069097 E-Filed 10/09/2015 03:26:04 PM Exhibit 3 * * *ELECTRONICALLY FILED 10/09/2015 03:26:05 PM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY*** 1 IN THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT OF THE STATE OF FLORIDA, IN AND FOR PINELLAS COUNTY TERRY GENE BOLLEA, professionally known as HULK HOGAN, Plaintiff, vs. Case No. 12-012447-CI-011 HEATHER CLEM; GAWKER MEDIA, LLC, aka GAWKER MEDIA, et a l ., Defendants. / HEARING BEFORE THE HONORABLE PAMELA A.M. CAMPBELL DATE: May 29, 2015 TIME: 1:30 p.m. to 4:27 p.m. PLACE: Pinellas County Courthouse 545 First Avenue North Courtroom C St. Petersburg, Florida BEFORE: Valerie A. Hance, RPR Notary Public, State of Florida at Large Pages 1 to 131 Riesdorph Reporting Group, Inc. (813) 222-8963 ______________________________________________________________ 113 1 because I don't think there is something that's 2 that -- we're not that far apart on this. 3 4 But would that mean then you next want to take up the discovery objections? 5 THE COURT: 6 MR. BERLIN: Yes. On the discovery -- Your Honor, as 7 you may remember when we were here last in April, in 8 an effort to streamline things, I came up with a 9 suggestion that we would deal with the — we'd get 10 the financial work discovery requests and we would 11 send out our objections. 12 conference, we were served with 334 discovery 13 requests. In the wake of that court 14 I have to say, I asked both Mr. Davis and 15 Mr. Thomas about this, and they both said that this 16 is unheard of. 17 certainly not the kind of thing that if you were 18 trying to streamline things and get to a fair 19 evaluation of what each of the three publisher 20 defendants was worth you would need to do. 21 It seemed rather striking to me and And what we tried to do in our objections was 22 to go through and say, look, we understand under 23 Florida law that if punitive damages are authorized 24 to be sought, that we are -- that we are going to 25 have to give over certain information that basically Riesdorph Reporting Group, Inc. (813) 222-8963 ______________________________________________________________ 114 1 speaks to our financial worth. 2 just, hey, here's an interrogatory, tell us what 3 you're worth. 4 documents to test it. 5 It's not limited to They're entitled to get some But we're in a situation here where the volume 6 of what's being asked and the volume of the number 7 of requests asking it and which are duplicative of 8 one another really is imposing an undue burden. 9 it's a little frustrating. Your Honor, because we And 10 proposed a procedure that we thought was designed to 11 streamline things rather than to wait until today 12 when this was ordered and let the discovery be 13 served and then we have to answer. 14 little frustrated that that was met with such 15 voluminous discovery. 16 And that we're a What we tried to do was to come up with a list 17 of things that we thought really fairly viewed and 18 answered these questions and probably then some. 19 And that appears in our objections starting at the 20 top of page 4. 21 the publisher defendant's actual and estimated net 22 worth. 23 interrogatories, bank statements for the — 24 know, the end of each year, going back to the 2011 25 and the current one. And it lists documents relating to It includes documents used in responding to you Brokerage and investment Riesdorph Reporting Group, Inc. (813) 222-8963 115 1 statements, same way, each year and then most recent 2 one. 3 already given over a lot of financial statements of 4 Gawker, but they wanted an updated one, so we were 5 going to update them and give financial statements 6 provided the other two defendants have them. 7 Accounts receivables, cash receipt journals, 8 documents reflecting liabilities, debts, mortgages, 9 other obligations on the idea that if you — Financial statements including — and we've part of 10 your net worth is determined by things that you 11 owed, that's deducing the net worth and they're 12 entitled to know that as well. 13 We give the defendant's ownership interest in 14 Gawker, whether Gawker has been sold to, merged 15 with, or consolidated with any other entity. 16 THE COURT: Can we just go through the list and 17 everybody make argument and I just make the ruling 18 on one by one? 19 20 MR. BERLIN: Yeah. I was going to say these were the things that we were going to give, so -- 21 THE COURT: 22 MR. BERLIN: Right. -- I don't know that there is, you 23 know, a dispute about those because we're going to 24 give those. 25 and so forth, and trusts. And we have given federal tax returns And then we're going to Riesdorph Reporting Group, Inc. (813) 222-8963 116 1 do interrogatories that the publisher defendant 2 swear to the authenticity of the documents, that 3 they have identified the amount of financial worth, 4 that they identified material assets and 5 liabilities, and whether the publisher defendant's 6 maintain their right to bring any action or -- 7 about, you know, recovering any debts. 8 owes you money, that's part of the net worth, and we 9 were going to give that information as well. 10 Somebody And we did this based on looking at Florida law 11 on the subject. 12 deal with the scope of financial worth discovery. 13 And all of the other ones were just substantially 14 more narrow. 15 interrogatories and one request for production. 16 of them involved three interrogatories. 17 involved a request for a three-year period for 18 income tax returns, personal or business profit and 19 loss statements and balance sheets. 20 it. 21 And there is a series of cases that One of them involved nine One One of them And that was There has to be a reasonable limit on this. 22 Your Honor, and this just isn't it. 23 the proposal we've outlined here is reasonable. 24 It's a little larger than what we had anticipated we 25 would be doing when we were here in April. And we think And I Riesdorph Reporting Group, Inc. (813) 222-8963 ______________________________________________________________ 117 1 know I said I would do this, if we needed to, by 2 Tuesday. I'd ask for a few more days into the next 3 week to get it done. 4 reasonable proposal, and I think that it should be 5 adopted by the Court rather than having to go 6 7 8 9 But I think this is a through and serving individual objections to what is essentially 330 documents of a discovery request, which is really, at this point in the case, busy work. 10 I mean, I want to try and cut to the chase. 11 We're going to try and move this forward. 12 what I want to do. 13 That's I think that's where I am on this. 14 And so I'm not sure what the -- the technical 15 relief is if it's a motion for protective order or 16 if there are objections that you then rule on, but, 17 either way, we would ask for appropriate relief that 18 memorializes that. 19 And I guess I could let the plaintiff speak to 20 that. 21 moment for rebuttal if there is anything that I feel 22 like I need to address. 23 subject, so -- And then if -- you know, just reserve a 24 THE COURT: 25 MR. BERLIN: I tried to be brief on this Thank you. Thanks. Riesdorph Reporting Group, Inc. (813) 222-8963 ______________________________________________________________ 118 1 THE COURT: 2 MR. VOGT: 3 THE COURT: 4 This is your time, Mr. Vogt. This is my time. I get to tell -- So, Mr. Vogt, tell me first why you don't agree with, yeah, Mr. Berlin's proposal. 5 MR. VOGT: Well, first and foremost, he's wrong 6 on the laws that pertain to discovery in terms of 7 punitive damages cases. 8 If I can approach. Your Honor. 9 THE COURT: 10 MR. VOGT: 11 THE COURT: 12 MR. VOGT: Did you give them a copy? Yes, ma'am. Okay. And this is the Dokes v. Kennedy 13 case. 14 case which is cited in the Tennant case that the 15 Gawker defendants are relying on to object to this 16 discovery. 17 It actually was a follow-up to the Donahue And it says, "Broad latitude regarding 18 discovery and punitive damages claims has been 19 allowed by this Court." 20 and Tennant case. 21 That was the Donahue case Several areas of inquiry are permissible; 22 income, cash flow, expenses, anticipated income, 23 expensed diminutions in income, anticipated 24 casualties affecting the assessment of punitive 25 damages. Riesdorph Reporting Group, Inc. (813) 222-8963 ____________________________________________________________________ 1 1 9 1 To that list. Judge, then I'm also adding 2 briefs about bank accounts, depositories, present 3 and recent ownership of property and its value, of 4 any interests in various business arrangements. 5 Interestingly, Your Honor, in this case, the 6 Court didn't find a problem with them using standard 7 family law interrogatories, which are incredibly 8 broad, much more broad than what we've served in 9 this case. 10 And the Court said that that was absolutely fine. 11 The reason they did that. Your Honor, was 12 because in the Donahue case -- may I approach? 13 And this actually dismisses with the notion 14 that what we've asked for here is busywork. 15 there is a long quote on the second page of this 16 case. Your Honor. 17 possibly just providing sworn statements to someone 18 and cut off any further aggressive inquiry into the 19 true financial capacity to respond to the issue of 20 punitive damages. And It says that -- discussed about 21 And the Court disagreed with that. 22 that aggressive ability to pursue financial 23 information. 24 people have a tendency to overinflate or 25 underinflate their assets and their net worth, even You get They said -- they recognized that Riesdorph Reporting Group, Inc. (813) 222-8963 ____________________________________________________________________ 1 2 0 1 under oath. 2 naivete to suggest that a sworn statement of one's 3 net worth must be accepted as the final word on that 4 important subject. 5 hidden assets is of the essence of the discovery 6 process. 7 recent income tax return or shown in a recent 8 financial statement furnished in another situation 9 when the current litigation was not envisioned is a And they said, "It is the height of The search for a forgotten or The whereabouts of assets disclosed by a 10 very definitely appropriate inquiry as is the 11 bona fides of the recent disposition of assets." 12 This is where -- 13 THE COURT: 14 But they're giving you some of the backup. 15 MR. VOGT: 16 THE COURT: Pardon me? They're giving you, though, the 17 backup. 18 broker investment account statements. 19 giving you more than just their view of what their 20 company is worth. 21 They're giving you the bank statements, the MR. VOGT: They're Correct, they have selectively 22 picked and chosen what they wanted to give. 23 requests really don't ask for anything outside the 24 scope of these cases. Your Honor. 25 THE COURT: Here is my concern. Riesdorph Reporting Group, Inc. (813) 222-8963 Our ____________________________________________________________________ 1 2 1 1 MR. VOGT: 2 THE COURT: 3 MR. VOGT: 4 THE COURT: And I'll be happy to go into them. We may be set for a July trial. Correct. I appreciate the fact that they 5 were just getting a ruling a few minutes ago on 6 punitive damages. 7 defense is really trying to streamline the process 8 to get you everything that -- that at least they can 9 in an expedited basis, so -- because prior to just a I appreciate the fact that the 10 week or ten days ago, we were all going to trial on 11 July and I still had a standing trial order out 12 there. 13 MR. VOGT: 14 THE COURT: 15 And we understand that. Your Honor. And so, I guess, for that reason, I think it's a good compromise for now. 16 And so tell me why it wouldn't be or what 17 additional things that you think you want to get on 18 this expedited schedule that the defense has agreed 19 to. 20 MR. VOGT: And our response is, it basically 21 ties in with your concerns that there is not much 22 time left. 23 very broad, because if we get responses, we're not 24 going to get a second chance to come back and ask 25 for more information. So these requests necessarily had to be Riesdorph Reporting Group, Inc. (813) 222-8963 122 1 So if the Court's inclined to grant this, this 2 request by the defense to initially limit the 3 inquiries to the issues that are set forth in this 4 letter, what we would ask is that that not be the 5 final order, but we have the ability to come back. 6 And if we see things in bank statements or financial 7 statements and we didn't get the documents or 8 information from those, that we -- there is proper 9 follow-up on, that we have the ability to do that. 10 11 THE COURT: Thank you. This was your main presentation. 12 MR. VOGT: 13 THE COURT: 14 All right. I'm sorry. I cut it short. That's okay, Your Honor. Mr. Berlin, would you agree with that? 15 MR. BERLIN: 16 THE COURT: I'm not sure what I'm agreeing to. So here — I think here — I think 17 you've made an ore tenus motion for protective order 18 to limit it just to your response to these things on 19 this expedited basis that you've agreed to provide. 20 So Mr. Vogt has then said, well, would they 21 then -- if I was going to grant your ore tenus 22 motion for protective order just on these things, 23 would they have an additional -- after they've had 24 the opportunity to go through all of this, would 25 they have an additional opportunity later on to Riesdorph Reporting Group, Inc. (813) 222-8963 123 1 further inquire. 2 MR. BERLIN: Your Honor, if I could say just 3 two things. 4 presented, I actually think are consistent with what 5 I've just said. 6 defendants -- involving 16 interrogatories, the 7 defendant answered six and objected to the other 8 ten. 9 One is that the cases that they have In the Donahue case, the We're not talking about 334 requests. And in the other one, it lists bank accounts, 10 depositories. 11 objecting to is if you get our bank accounts, you 12 don't need every deposit slip for every -- you know, 13 be just a bunch of paper. 14 to misstate what the deposit is. 15 account, so -- and the amounts that are there 16 reflect what's what. 17 We've giving this stuff. What we're The bank has no incentive It's on the bank So I think that -- I think it's consistent with 18 what I was saying. I generally think that if for 19 some reason -- I mean, remember that the discovery 20 that we're talking about here. Your Honor, is 21 answering one question: What are you worth, right? 22 And, realistically, if we give over all that 23 stuff, it would be very difficult to imagine that 24 they would not be able to formulate a reasonable 25 answer to that question. Right? Riesdorph Reporting Group, Inc. (813) 222-8963 124 1 T h e y ' v e a l s o now a s k e d f o r d e p o s i t i o n s o f each 2 o f t h e p e o p l e on t h a t 3 them f o r t h e end o f J u n e . 4 com bination, 5 But i f 6 a n s w e r t h e q u e s t i o n w h a t a r e y o u w o r t h w i t h o u t some 7 a d d itio n a l piece 8 th at 9 Your H onor, 10 A nd, y o u know, the w h i l e t h a t w ould seem v e r y u n l i k e l y . f o r some r e a s o n t h e y cam e a n d s a i d we c a n ' t in fo rm atio n , th a t's s u b j e c t and w e 'v e s c h e d u le d of in fo rm atio n , a n d we o b j e c t t o and th e y want to I h a v e no o b j e c t i o n — th at th a t's to come b a c k t o th at. what y o u 'r e h e re I th in k for -- 11 THE COURT: R ig h t. 12 MR. BERLIN: 13 THE COURT: 14 So I'm granting defense's ore tenus motion for -- to re so lv e th a t d is p u te , A ll r ig h t . so - - Thank you. 15 protective order to limit the discovery to those 16 things that the defense has agreed to provide in the 17 May 22nd, 2015, letter to Mr. Harder. 18 defense is going to provide this information -- was 19 it by next Thursday, the 4th? 20 wanted? 21 22 MR. BERLIN: the 2nd. Is that what you I think we had originally proposed And if I could look at -- 23 THE COURT: 24 MR. BERLIN: 25 And that the 3rd? If I could look at Ms. Smith and find out. Riesdorph Reporting Group, Inc. (813) 222-8963 125 1 MS. SMITH: 2 MR. TURKEL: When we cut the deal to do all 3 4 I think, yes. this today, I thought it was the 2nd. THE COURT: But then I think that the defense 5 asked for a few days. 6 MR. BERLIN: I'm asking -- basically, this is 7 more than we thought it was going to be, and if I 8 had a couple extra days. 9 Friday of next week, it's still before the 10 depositions. If we can do Thursday or If I can get it done sooner, I will. 11 THE COURT: 5:00 on the 4th, is that good? 12 MS. SMITH: We'll make it. 13 THE COURT: Okay. 14 MR. BERLIN: 15 that production, so -- 16 THE COURT: 17 MR. BERLIN: 18 I'm sorry. Yes, I'm sorry as well. I apologize. 19 THE COURT: 20 Thursday. 21 the — 22 Ms. Smith is bearing the burden of So -- all right. That's June 4th. MR. BERLIN: So by 5:00 All right? And with 5:00 p.m. on the 4th, yes. 23 24 25 Riesdorph Reporting Group, Inc. (813) 222-8963 126 1 2 MR. BERLIN: Your Honor, I have one other 3 question about the punitive damages since Your Honor 4 has ordered that that go forward. 5 THE COURT: 6 MR. BERLIN: Yes. My understanding, again, this is 7 not -- I'm not an expert at this, so perhaps 8 Mr. Davis can speak to this if I get this wrong, but 9 my understanding is that under a case called 10 W.R. Grace, that when that -- when punitive damages 11 are issued, that it is the practice in Florida to 12 bifurcate the issue of net worth presentation to the 13 jury. And I would ask that we do that in this case. 14 THE COURT: So the first part of the trial is 15 going to go forward. 16 decision on the underlying complaint. 17 that point in time, based on the verdict of the 18 jury, then they'll present the additional 19 information. 20 decision. The jury will make their And then at The same jury will make additional 21 Do you agree with that, Mr. Turkel? 22 MR. TURKEL: I don't know that it's mandatory 23 to do it that way. 24 bifurcate and you vet out whether it has to happen. 25 Usually they file a motion to You know, it's, to me, something that we'll Riesdorph Reporting Group, Inc. (813) 222-8963 Filing # 33069097 E-Filed 10/09/2015 03:26:04 PM Exhibit 4 * * *ELECTRONICALLY FILED 10/09/2015 03:26:05 PM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY*** Filing # 28765014 E-Filed 06/22/2015 01:16:10 PM IN THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT IN AND FOR PINELLAS COUNTY, FLORIDA TERRY GENE BOLLEA professionally known as HULK HOGAN, Plaintiff, vs. Case No. 120124470-011 HEATHER CLEM; GAWKER MEDIA, LLC aka GAWKER MEDIA; GAWKER MEDIA GROUP, INC. aka GAWKER MEDIA; GAWKER ENTERTAINMENT, LLC; GAWKER TECHNOLOGY, LLC; GAWKER SALES, LLC; NICK DENTON; A.J. DAULERIO; KATE BENNERT, and BLOGWIRE HUNGARY SZELLEMI ALKOTAST HASZNOSITO KFT aka GAWKER MEDIA, Defendants. / PLAINTIFF TERRY BOLLEA’S MOTION TO COMPEL FULL AND COMPLETE FINANCIAL WORTH DISCOVERY AND ADDITIONAL FINANCIAL WORTH DEPOSITIONS Plaintiff Terry Bollea, professionally known as “Hulk Hogan” (“Bollea”), by counsel and pursuant to Rule 1.380, Florida Rules of Civil Procedure, moves for the entry of an order compelling Defendants, Gawker Media, LLC (“Gawker”), Nick Denton (“Denton”) and A.J. Daulerio (“Daulerio”) (collectively, “Gawker Defendants”), to provide a full and complete disclosure of their net worth and to appear for additional depositions once those disclosures have been made, and states in support as follows: On May 29, 2015, Mr. Bollea was granted leave to amend to assert a claim for punitive damages and, as a result, is entitled to full and complete discovery concerning Gawker Defendant’s net worth. Gawker Defendants objected to the scope of the financial worth discovery that Mr. Bollea originally served. Based on these objections, at the May 29, 2015 1 hearing, the parties agreed and the Court ordered that Gawker Defendants would provide certain financial worth discovery to Mr. Bollea, with the caveat that Mr. Bollea would be entitled to seek additional discovery if Gawker Defendants’ responses were incomplete. Most notably, Gawker Defendants were required to provide documents “sufficient to show... Gawker’s, Denton’s and Daulerio’s actual and estimated net worth.” Mr. Bollea was hopeful that Gawker Defendants would, as promised, provide discovery sufficient to determine their net worth. Unfortunately, this has not occurred. Gawker Defendants instead produced minimal, incomplete documentation, and general, unsubstantiated testimony regarding their net worth. They produced some tax returns. They produced some financial statements. They produced some year-end, undetailed account statements. Gawker Defendants produced as little information as possible while still attempting to make it appear as if they were complying with the Court’s order. Many of the documents Gawker Defendants produced demonstrate that other relevant documents exist that were not provided to Mr. Bollea. Additionally, on June 16-17, 2015, Mr. Bollea’s counsel incurred the cost and expense of preparing for and traveling to New York to take the depositions of Gawker Defendants regarding their net worth. These depositions confirmed that Gawker Defendants failed to produce numerous documents that are necessary and relevant to establishing their net worth. Many of these documents are easily accessible by Gawker Defendants on their computers and other devices. In particular, Mr. Bollea learned that the following, discoverable documents exist, which Gawker Defendants failed to produce: 1. Written valuation(s) of Gawker-affiliated companies: In early 2015, Gawker explored debt financing through Young America Capital, Inc. (“YAC”). As part of that process, Gawker provided, or YAC prepared, a written valuation of Gawker Media Group, Inc. (“GMGI”), including its wholly owned assets, Gawker and Kinja, KFT (“Kinja”). It is commonplace for such valuations to be prepared during debt financing efforts. Yet Gawker Defendants failed to produce this written valuation related to its 2 debt financing efforts through YAC, or any other written valuations of Gawker-affiliated companies. All should be ordered produced. 2. Written future financial projections: As part of its involvement with YAC, Gawker provided YAC with various future financial projections for the company. Gawker’s corporate designee, COO and acting CFO Scott Kidder, testified that he prepared various financial projections during 2014-2015. Mr. Kidder also confirmed that he maintains copies of these projections on his computer. However, none of these projections were produced. Mr. Bollea is entitled to all financial projections for GMGI, Gawker and Kinja prepared during 2014 through 2015. 3. Financial Information Provided to The Brenner Group: Mr. Denton produced certain reports from The Brenner Group, which valued certain GMGI stock. Yet GMGI, Gawker and Kinja provided financial projections and other financial documents and information to The Brenner Group for use in its valuation. None of those financial projections, or the other financial information and documents were produced to Mr. Bollea. Mr. Bollea is entitled to these documents because they can be (and actually were) used to assist in the valuation of GMGI, Gawker and Kinja. 3. GMGI’s tax returns: None of GMGI’s tax returns have been produced. Mr. Bollea is entitled to these documents to assist in the valuation of defendant Nick Denton’s ownership interest in GMGI, which is his largest asset. 4. Kinja’s and GMGI’s bank statements: None of these bank statements have been produced. Mr. Denton and Mr. Kidder confirmed at their depositions that these entities have bank accounts. Mr. Bollea is entitled to the statements from these bank accounts to value Mr. Denton’s ownership interest in GMGI, including GMGI’s subsidiaries, Gawker and Kinja, and their assets. 5. Kinja’s tax returns: Kinja is a Hungarian corporation to which Gawker transfers millions of dollars each year (constituting all or nearly all of Gawker’s profits). Kinja files tax returns in Hungary. However, Kinja’s tax returns have not been produced. These documents are necessary to value Mr. Denton’s ownership interest in GMGI, which owns 100% of Kinja. 6. Denton’s financial information sent to JP Morgan: Mr. Denton recently obtained a $2 million mortgage on his New York apartment, and used the proceeds for renovations and other expenditures. However, Mr. Denton failed to produce copies of his financial information and application to JP Morgan for the $2 million mortgage. Mr. Bollea is entitled to this documentation, which will include the net worth and financial information that Mr. Denton himself provided to JP Morgan in connection with his mortgage. 7. Denton’s National Financial Services accounts: Mr. Denton failed to produce account statements for his “National Financial Services” account(s), as listed in his tax returns, which generated over $4,600 in interest in alone. Mr. Bollea is entitled to this documentation to determine the value of Mr. Denton’s assets. 3 8. Denton’s foreign bank account statements: Mr. Denton lists several foreign bank accounts on his 2012 tax return. However, he failed to produce any bank statements from any of these accounts. 9. Governing documents associated with GMGI, Gawker and Kinja: Mr. Denton and Gawker failed to produce any operating agreements, shareholder agreements, stock option agreements, buy-back agreements, by-laws and similar agreements or governing documents associated with GMGI, Gawker and Kinja. These documents are necessary to value Mr. Denton’s stock, as well as to determine whether there is any control premium associated with it. 10. Gawker, GMGI, and/or Kinja insurance policies: Mr. Denton and Gawker failed to produce insurance policies for Gawker, GMGI and/or Kinja providing for key man insurance, renters insurance, or business loss insurance. These policies are relevant to determining the value of GMGI and Gawker, as well as their assets and business operations. Mr. Bollea is entitled to these materials. 11. Silicon Valley Bank construction loan documents: Gawker failed to produce documents associated with the recent $8 million construction loan Gawker obtained from Silicon Valley Bank (SVB) to construct its new offices located at 114 Fifth Avenue. These documents would include, but not be limited to, loan applications, financial disclosures, promissory notes, loan agreements, guarantees, financial covenants and conditions, and related materials. Mr. Bollea is entitled to these documents to value Gawker and GMGI. 12. Financial disclosures re: 114 Fifth Avenue lease: Gawker, Kinja and/or GMGI provided financial disclosures to their new landlord in connection with the negotiation and execution of the new lease for 114 Fifth Avenue. Mr. Bollea is entitled to these financial disclosures. 13. Kinj a/Gawker Inter-Company Development Agreement, Royalty Agreement, and related documents: Mr. Denton and Gawker failed to produce the Inter-Company Development Agreement between Kinja and Gawker, and any similar agreement(s) relating to the loaning out of one company’s employees to the other company, as well as the Royalty Agreement between Kinja and Gawker, which provides the basis for Gawker transferring a large percentage of its profits to Kinja each year. They have also failed to produce copies of documents sufficient to establish how the “royalty payment” from Gawker to Kinja is calculated each year, and the services provided in exchange. Mr. Bollea is entitled to these agreements and documents to assist in the valuation of Gawker and GMGI. 14. Denton’s Loans/Investments: Mr. Denton failed to produce any documents evidencing loans to or investments made by Mr. Denton in GMGI, Gawker, or Kinja. Mr. Denton testified that such documents exist. 15. International licensing agreements: The only source of revenue for the Gawker entities, aside from the revenue generated by Gawker, is from international licensing agreements. These Licensing Agreements between Kinja and other companies for 4 international licensing of Gawker content and/or Kinja intellectual property have not been produced. 16. Monthly financial reports to SVB: Mr. Kidder confirmed at his deposition that Gawker is required to provide monthly financial reports to SVB, under the terms and conditions of covenants in the contracts governing Gawker’s line of credit and notes. These monthly financial reports prepared by Mr. Kidder and provided to SVB were not produced. 17. Documents associated with a GMGI “stock split” in 2013: were not produced. 18. Gawker Stock Option Plan: was not produced. 19. Capitalization tables: Only one “capitalization table” or “cap table” for GMGI was produced. Mr. Bollea is entitled to cap tables for Gawker, GMGI and Kinja, from 2011 through the present to trace the ownership of the companies. 20. Board meeting minutes: Mr. Bollea is entitled to all board meeting minutes reflecting the discussion of Gawker, Kinja or GMGI’s financial condition, loans, stock prices, royalty payments, offers to buy GMGI or any interest therein, debt financing, and valuations of GMGI, Gawker and/or Kinja during 2014-2015. 21. Gawker and GMGI’s state and local income tax returns: were not produced. 22. Denton’s prenuptial agreement: Mr. Denton did not produce his prenuptial agreement, including any financial disclosures by Mr. Denton associated with it. Under New York law, Mr. Denton was required to disclose his net worth in connection with this agreement. See McKenna v. McKenna, 994 N.Y.S.2d 381, 383 (A.D. 2014). Mr. Bollea is entitled to these recent disclosures. 23. Denton’s Citibank international account statements: Mr. Denton failed to produce copies of statements from 2012 to the present for his Citibank international account, which is listed on Mr. Denton’s 2011 tax returns. 24. Denton’s Fidelity investment accounts: Mr. Denton failed to produce statements from 2012 to the present for all of his Fidelity investment accounts. These accounts generated over $ 11,000 in interest in a calendar year, and clearly contained significant amounts of money. 25. Denton’s New York apartment insurance policies: Mr. Denton failed to produce copies of insurance policies associated with his New York apartment, as well as a detailed description of, and values for the contents of, the apartment. Although Mr. Denton testified otherwise during his deposition, his mortgage requires him to maintain this insurance. 26. Mr. Denton’s 2013 W-2 forms: were not all produced. 27. Denton’s U.S. treasury bonds statements: Mr. Denton did not produce statements for his account that contained $440,000 in U.S. treasury bonds and other 5 unspecified securities which he sold in or about 2012, or any documents demonstrating how this money was used. 28. Denton’s Bank of Scotland account: Mr. Denton failed to produce any statements during the period 2012 to the present for a Bank of Scotland account about which he testified at deposition. 29. Denton’s Citigold accounts: Mr. Denton did not produce statements for his three Citigold accounts in London for the period 2012 to the present. At least one of these accounts contained more than $100,000. 30. The transaction details from Mr. Denton’s Chase bank account: were redacted. 31. Detailed monthly statements for Defendants’ financial accounts: Mr. Denton, Mr. Daulerio, Gawker, GMGI and Kinja all failed to produce detailed monthly statements for all of their financial accounts, including details of all deposits, credits, transfers, debits, withdrawals and checks. The details on the year-end statements that were produced are insufficient to determine the Gawker Defendants’ respective net worth. 32. Denton’s irrevocable family trust documents: Mr. Denton testified that he has placed an amount of shares that equal (according to the sole cap table produced by Gawker) over 20% of the total value of GMGI into an irrevocable family trust run by a member of his immediate family, but over which he claims to have no control. Mr. Bollea is entitled to documents from which he can ascertain whether, in fact, these shares can no longer be considered a part of Mr. Denton’s net worth. Such documents include the trust documents, as well as those that clearly identify the grantor, trustees, beneficiaries and terms of the trust, as well as what shareholder voting rights belong to the family trust. Mr. Bollea is further entitled to documents that evidence the consideration originally paid for the shares placed in trust, the date of creation of the trust, and the date that these shares of GMGI belonging to Mr. Denton were deposited into the trust. 33. Statements for Kinja’s financial accounts in Hungary: were not produced. 34. Reports and notes of pitch meetings and meetings held with prospective purchasers or financiers who sought to buy Gawker or GMGI or a portion thereof: were not produced. Mr. Denton testified that at least two of these meetings took place, and the value of GMGI was discussed in at least one of the meetings. These documents should include, but are not limited to, all documents associated with the meeting held last year at which an offer was made to purchase GMGI. These documents should also include, but are not limited to, all documents associated with the presentations YAC provided to two potential “investors” in connection with efforts to obtain debt financing for Gawker. They should also include the presentation itself (i.e., Powerpoint), and any investor information materials or offering documents. Gawker Defendants also should be required to provide Mr. Bollea with the names of the potential “investors” and the Media Company that made the offer to purchase GMGI last year (which Mr. Denton refused to disclose during his deposition). 6 All of this information is discoverable. In Tennant v. Charlton, 377 So.2d 1169, 1170 (Fla. 1979), the Florida Supreme Court quoted with approval the opinion in Donahue v. Hebert, 355 So.2d 1264, 1265 (Fla. 4th DCA 1978), on the proper scope of net worth discovery: “The search for forgotten or hidden assets is of the essence of the discovery process. The whereabouts of assets disclosed by a recent income tax return, or shown on a recent financial statement furnished in another situation when the current litigation was not envisioned is very definitely appropriate inquiry as is the bona Tides of the recent disposition of assets. These are routine inquiries for every knowledgeable trial lawyer in cases in which the financial resources of a party is a relevant issue. One must be afforded reasonable latitude in double and cross checking a party's statements about his current net worth. This, of course, can be done by reviewing income tax returns, recent financial statements, and the myriad of other sources of financial information.” Mr. Bollea is entitled to information that allows him to determine Gawker Defendants’ net worth. In the case of Gawker, that includes projections of future revenue (which could affect the value of the company), and financial information provided to potential financiers and professionals engaged to value the company, as well as tax return information. In the case of Mr. Denton, it includes financial information provided to mortgage lenders, bank account information, and information regarding the value of the companies in which he holds stock. This also includes the value of GMGI and its subsidiaries, as Mr. Denton’s shares in that company are by far the most valuable single asset he holds. As such, this especially includes information regarding the family trust into which Mr. Denton has testified that he has transferred a significant portion of his main assets - his shares in GMGI. Mr. Bollea is not required to rely on Gawker Defendants’ representations as to what any of these assets are worth (and whether they are in the 7 possession of the Gawker Defendants)—under Tennant and Donahue, he is entitled to test and verify Gawker Defendants’ assertions. For the foregoing reasons, the motion to compel should be granted. Moreover, because Gawker Defendants failed to produce documents within their possession, custody and control to which Mr. Bollea is clearly entitled, Gawker Defendants should be required to appear for the completion of their financial worth depositions once they have provided full and complete financial worth discovery. Mr. Bollea also respectfully requests that the Court consider ordering these depositions to take place in Pinellas County, Florida, so that he is not be forced to pay the cost and expense of traveling to New York again to complete these depositions. Alternatively, Mr. Bollea respectfully requests the Court consider requiring Gawker Defendants to pay for the costs associated with travel, including attorney time, incurred in completing these depositions. Respectfully submitted, /s/Kenneth G. Turkel________________________ Kenneth G. Turkel, Esq. Florida Bar No. 867233 Shane B. Vogt Florida Bar No. 0257620 BAJO | CUVA | COHEN | TURKEL 100 North Tampa Street, Suite 1900 Tampa, Florida 33602 Tel: (813)443-2199 Fax: (813)443-2193 Email: k t u r k c l @ b a i o c u v a . c o m Email: svogt@baiocuva.com - and - 8 Charles J. Harder, Esq. PHVNo. 102333 Douglas E. Mirell, Esq. PHVNo. 109885 Sarah E. Luppen, Esq. PHVNo. 113729 Jennifer J. McGrath, Esq. PHVNo. 114890 HARDER MIRELL & ABRAMS LLP 1925 Century Park East, Suite 800 Los Angeles, CA 90067 Tel: (424) 203-1600 Fax: (424) 203-1601 Email: charder@hmafinn.eom Email: dniirell@hmafinn.com Email: sluppen@hmafirm.com Email: imcgrath@hmarmn.com 9 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished by E-Mail via the e-portal system this 22nd day of June, 2015 to the following: Barry A. Cohen, Esquire Michael W. Gaines, Esquire The Cohen Law Group 201 E. Kennedy Blvd., Suite 1950 Tampa, Florida 33602 bcohcn@tampalawfirm.com mgaincs@lampalawnrm.com jha 11c@ta mpa 1awfi nn .com Gregg D. Thomas, Esquire Rachel E. Fugate, Esquire Thomas & LoCicero PL 601 S. Boulevard Tampa, Florida 33606 m w a lsh @ ta m p a la w n rm .co m ab ccn e@ tlolaw firm .co m Counsel for Heather Clem Counsel for Gawker Defendants David R. Houston, Esquire Law Office of David R. Houston 432 Court Street Reno, NV 89501 Seth D. Berlin, Esquire Paul J. Safier, Esquire Alia L. Smith, Esquire Michael D. Sullivan, Esquire Levine Sullivan Koch & Schulz, LLP 1899 L. Street, NW, Suite 200 Washington, DC 20036 sbcr1in@lskslaw.com psaficr@lskslaw.com asmith@lskslaw.com msuHivan@lskslaw.com Pro Hac Vice Counselfor Gawker Defendants d h o u sto n @ h o u sto n atlaw .com k ro sscr@ h o u sto n a tla w .co m Michael Berry, Esquire Levine Sullivan Koch & Schultz, LLP 1760 Market Street, Suite 1001 Philadelphia, PA 19103 inbcrrv@lskslaw.com Pro Hac Vice Counsel for Gawker Defendants g th o m a s@ tlo la w firm .co m rfu gate@ tlolaw firm .com kbrown@tlolawfirm.com Kirk S. Davis, Esquire Shawn M. Goodwin, Esquire Akerman LLP 401 E. Jackson Street, Suite 1700 Tampa, Florida 33602 kirk.davis@akcrman.com shawn.goodwin@akerman.com Co-Counselfor Gawker Defendants /s/ Kenneth G. Turkel Attorney 10 Filing # 33069097 E-Filed 10/09/2015 03:26:04 PM Exhibit 5 * * *ELECTRONICALLY FILED 10/09/2015 03:26:05 PM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY*** IN THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT IN AND FOR PINELLAS COUNTY, FLORIDA TERRY GENE BOLLEA professionally known as HULK HOGAN, Case No. 12012447CI-011 Plaintiff, vs. HEATHER CLEM, et al.. Defendants. /*• ORDER REGARDING PLAINTIFF TERRY BOLLEA’S MOTION TO COMPEL FURTHER FINANCIAL WORTH DISCOVERY AND DEPOSITIONS This cause came before the Court on June 29, 2015, on Plaintiff Terry Bollea's “Motion to Compel Full and Complete Financial Worth Discovery and Additional Financial Worth Depositions” (the “Motion”). The Court has reviewed the Court file, reviewed and considered the Motion and response papers, heard argument of counsel, and is otherwise fully advised. IT IS ORDERED AND ADJUDGED, that the portion of the Motion seeking additional financial worth document discovery is GRANTED IN PART AND DENIED IN PART, as follows: • Request No. 1 (“Written valuation(s) of Gawker-affiliated companies”): Request denied. Gawker shall provide written verification that no additional valuations of the companies exist, except The Brenner Group valuations. • Request No. 2 (“Written future financial projections”): Request denied. • Request No. 3 (“Financial Information Provided to The Brenner Group”): Request denied. • Second Request No. 3 (“GMGI’s tax returns”): Gawker shall provide written verification that GMGI does not file tax returns. • Request Nos. 4 and 33 (“Kinja’s and GMGI’s bank statements” and “statements for Kinja’s financial accounts in Hungary): Requests granted 1 in part and denied in part. Gawker shall provide 2015 bank statements for GMGI and Kinja. • Request No. 5 (“Kinja’s tax returns”): Request denied. • Request No. 6 (“Denton’s financial information sent to JP Morgan”): Request denied. • Request Nos. 7, 8, 23, 29 (additional bank account statements for Nick Denton): Requests granted in part and denied in part. Mr. Denton shall provide account statements for each of the bank accounts identified in plaintiffs’ requests for December 2011, December 2012, December 2013, December 2014, and May 2015. • Request Nos. 9, 13 (governing documents agreements): Requests granted. • Request No. 10 (“Gawker, GMGI, and/or Kinja insurance policies”): Request denied. • Request No. 11 (“Silicon Valley Bank construction loan documents”): Request granted in part and denied in part. Gawker Media, LLC shall produce its loan application for the June 2015 construction loan it obtained from Silicon Valley Bank. • Request No. 12 (“Financial disclosures re: 114 Fifth Avenue lease”): Request denied, except that Gawker shall provide a written verification that the financial disclosures Gawker Media, LLC made to its landlord for 114 Fifth Avenue are the same as those which have already been produced in this litigation. • Request No. 14 (Nick Denton’s loans or investments in GMGI, Gawker and/or Kinja): Request denied. • Request No. 15 (“International licensing agreements”): This request was withdrawn by the plaintiff. • Request No. 16 (“Monthly financial reports to SVB”): Request granted in part and denied in part. Gawker Media, LLC shall produce the monthly financial reports it has submitted to Silicon Valley Bank in 2015. • Request Nos. 17, 18 (documents regarding GMGI’s stock split and the Gawker stock option plan): Requests granted.• • Request No. 19 (historical capitalization tables for GMGI, Gawker, and Kinja): Request denied, except that Gawker shall arrange to have GMGI 2 and inter-company provide a written verification that the GMGI capitalization table previously produced in this litigation is the most recent version. • Request No. 20 (board meeting minutes reflecting discussion of Gawker, Kinja, or GMGI’s financial condition during 2014-2015): This request was withdrawn by plaintiff. • Request No. 21 (“Gawker and GMGI’s state and local income tax returns”): Request denied, except that Gawker Defendants shall provide a written verification that Gawker Media, LLC’s state and local tax returns for 2011-2013 reflect the same income and expense information that appears on its federal returns. • Request No. 22 (“Denton’s prenuptial agreement”): Request denied. • Request No. 24 (“Denton’s Fidelity investment accounts”): granted. • Request No. 25 (“Denton’s New York apartment insurance policies”): Mr. Denton shall provide a verification that he does not maintain insurance on his Manhattan condominium, other than the insurance provided to all tenants by the condominium association. • Request No. 26 (“Mr. Denton’s 2013 W2 forms”): withdrawn by the plaintiff. • Request This request was Request No. 27 (“Denton’s U.S. treasury bonds statement”): Request granted. • Request Nos. 30, 31 (transaction details for bank statements and every monthly statement for each account since 2011): Requests denied. • Request No. 32 (“Denton’s irrevocable family trust documents”): Request granted. • Request No. 34 (“Reports and notes of pitch meetings and meeting held with prospective purchasers or financiers who sought to buy Gawker or GMGI or a portion thereof’): Request granted in part and denied in part. Gawker shall provide presentation materials used in any pitch meetings and/or any other meetings held with prospective purchasers or financiers. IT IS FURTHER ORDER AND ADJUDGED that, by agreement of the parties, Gawker shall produce the materials ordered produced within seven days of the entry of this Order. 3 IT IS FURTHER ORDERED AND ADJUDGED that plaintiffs request for additional financial worth depositions is DENIED. DONE AND ORDERED in Chambers at Pinellas County, Florida this ___ day of , 2015. ORIGINAL SIGNED Pamela A.M. Campbell Circuit Court Judge Copies furnished to Counsel of Record 4 Filing # 33069097 E-Filed 10/09/2015 03:26:04 PM Exhibit 6 * * *ELECTRONICALLY FILED 10/09/2015 03:26:05 PM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY*** CONFIDENTIAL P riv ileg e Log o f D e fe n d a n t G a w k e r M e d ia , LLC 3 /2 8 /2 0 1 4 Ite m # CC From To D ate Subject Privilege Type Gaby Darbyshire 1 3 /2 1 /2 0 1 2 Ryan Brown 2 3 /1 0 /2 0 1 4 < ryan@ gaw ker.com > H eath er Dietrick 3 3 /1 0 /2 0 1 4 < h dietrick@ gaw ker.com > H eath er Dietrick 4 5 /1 3 /2 0 1 3 < h dietrick@ gaw ker.com > 5 5 /1 3 /2 0 1 3 < hdietrick@ gaw ker.com > H eath er Dietrick Nicholas Soivilien Re: Copyrighted Images o f Moss STL Re: Copy right infringem ent. AC, WP Fwd: Copy right infringem ent. AC, WP Fwd: Pageviews on th e Rubino post/Seidm an photo AC, W P Jamie M elen d ez Legal Jamie M elen d ez Jesse M a Jesse M a Charlie Jane Anders ; A nnalee N ew itz Fwd: C&D AC, W P Legal Re: Unauthorized photo usage AC, WP Legal Re: Unauthorized photo usage AC, WP Legal Re: U nauthorized photo usage AC, WP Legal Re: U nauthorized photo usage AC, W P skidder@ gm ail.com Jamie M elen d ez ; Legal < legal@ gaw ker.com > Re: Unauthorized photo usage AC, W P skidder@ gm ail.com Jamie M elen d ez ; Legal Re: Unauthorized photo usage AC, WP Fwd: Unauthorized photo usage AC, WP Re: Unauthorized photo usage AC, WP Re: Unauthorized photo usage AC, WP Re: Unauthorized photo usage AC, WP Re: Unauthorized photo usage AC, WP Jamie M elen d ez 6 3 /6 /2 0 1 4 John Cook Jamie M elen d ez 7 3 /6 /2 0 1 4 John Cook Jamie M elen d ez 8 3 /6 /2 0 1 4 John Cook Jamie M elen d ez 9 3 /6 /2 0 1 4 John Cook 10 3 /6 /2 0 1 4 John Cook 11 3 /6 /2 0 1 4 John Cook legal@ gaw ker.com 12 3 /6 /2 0 1 4 < legal@ gaw ker.com > Scott Kidder 13 3 /6 /2 0 1 4 Jamie M elen d ez 14 3 /6 /2 0 1 4 Scott Kidder 15 3 /6 /2 0 1 4 16 3 /6 /2 0 1 4 < hdietrick@ gaw ker.com > H eath er Dietrick skidder@ gm ail.com Jamie M elendez legal@ gawker.com < legal@ gaw ker.com > H eath er Dietrick < hdietrick@ gaw ker.com > H eath er Dietrick < hdietrick@ gaw ker.com > legal@ gawker.com < legal@ gaw ker.com > johnduncan@ gaw ker.com Scott Kidder ; legal@ gawker.com < legal@ gaw ker.com > AC: Attorney/Client Privilege; WP: Work Product Doctrine STL: Settlement Privilege; Cl: Common Interest Privilege Page 1 Privilege Log of Defendant Gawker Media, LLC CONFIDENTIAL 3/28/20 14 Neetzan Zim m erm an < neetzan@ gaw ker.com >; Legal 2532 1 1 /2 0 /2 0 1 3 Jesse M a Tornado Photos AC, WP AC 2533 undated G aw ker M ed ia, LLC John Duncan Summary Structural O utline 2534 G aw ker M ed ia, LLC M a y e r Brown LLP Economic Analysis AC: Attorney/Client Privilege; WP: Work Product Doctrine STL: Settlement Privilege; Cl: Common Interest Privilege Page 172 Filing # 33069097 E-Filed 10/09/2015 03:26:04 PM Exhibit 7 * * *ELECTRONICALLY FILED 10/09/2015 03:26:05 PM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY*** 132 S RODEO DRIVE. SUITE 301 BEVERLY HILLS, CA 9 0 2 1 2 -124 203 1600 • WWW,HMAFIRM.COM September 11, 2015 VIA EMAIL Seth D. Berlin, Esq. Michael Berry, Esq. Paul J. Safier, Esq. Alia L. Smith, Esq. Levine Sullivan Koch & Schulz, LLP 1899 L Street, NW, Suite 200 Washington, DC 20036 Re: Gregg D. Thomas, Esq Rachel E. Fugate, Esq Thomas & LoCicero PL 601 S. Boulevard Tampa, Florida 33606 Terry Gene Bollea v. Heather Clem. Gawker Media LLC. et al Circuit Court of the Sixth Judicial Council in and for Pinellas County, Florida Case Number 120124470-011 Dear Seth: This letter concerns the financial worth discovery conducted by Mr. Bollea pursuant to the Court’s July 20, 2015 Order compelling production of documents. Such discovery remains incomplete, and we write in the hopes of informally resolving the issue and avoiding a motion. Missing trust documents. Gawker and Mr. Denton are in violation of the Court’s July 20, 2015 Order requiring that they turn over all documents relating to his family trust which would show the extent of his control over that trust, including trust documents, documents that show the grantor, trustees, beneficiaries, and terms of the trust, shareholder voting rights, and documents evidencing the consideration originally paid for the shares, date of creation of the trust, and date shares in GMGI belonging to Mr. Denton were deposited into the trust. All of these documents were clearly requested in Mr. Bollea’s motion to compel, and Mr. Bollea’s motion was granted in full. However, no such documents were produced and Mr. Denton contends in his Affidavit that he “do[es] not have the documents memorializing the trust The requested documents, however, go beyond those that merely memorialize the trust. Moreover, any documents within the possession of Mr. Denton’s counsel (who presumably do possess copies of a trust created at the behest of Mr. Denton), or anyone else who can readily make the documents available to Mr. Denton upon his request, are clearly within Mr. Denton’s custody and control and should be produced. Without these documents, it is impossible to fully test the veracity of Mr. Denton’s claim that he does not control the shares in the trust and thus that his shares in GMGI (by far his largest asset) are not subject to a control premium. Mr. S. Berlin, Esq. September 11, 2015 Page 2 Missing account statements. Mr. Denton’s 2012 tax return shows a London CitiGold account, number 0000499375, with a maximum value during the year of over $100,000. No statements from this account were produced, in violation of the court’s July 20 order. Please produce statements from this account consistent with the terms of the Court’s order (i.e., for December 2011, December 2012, December 2013, December 2014, and May 2015). Additionally, in violation of the Court’s July 20 order, the production is missing statements for December 2011, 2012, and 2013 for CitiGold account number 0080708432, and December 2011, 2012, 2013, and 2014 for CitiGold account number 0083411244, both of which are listed on the 2012 tax return. Please produce these statements as required by the Court’s order. Transfer pricing studies. Gawker has previously denied the existence of any transfer pricing studies, in its response to the Fifth Set of Document Demands (e.g., Response to Request 140: “subject to Gawker’s understanding of the term ‘transfer pricing studies’, Gawker states that it has no non-privileged documents responsive to this Request”). However, the GawkerKinja license agreement [page GAWKER28910_C] recites the existence of such a study dated December 12, 2011, which allegedly formed the basis of the compensation paid to Kinja pursuant to the license agreement. This document should have been produced in response to numerous document demands served during merits discovery, as well as during net worth discovery. Please produce it forthwith. Latest statement for each account. Mr. Bollea wishes to establish Mr. Denton’s net worth as close to the time as trial as possible. The Court’s order attempted to deal with this by requiring production of the latest statement (at the time May 2015) from each account held by Mr. Denton. However, with the trial continuance, Mr. Bollea now requires the latest account statement from each account so as to update the valuation. Please produce such statements. Please provide written confirmation no later than the close of business on September 15, 2015 that these documents will be produced forthwith. Otherwise, Mr. Bollea will be forced to again move to compel and to seek sanctions for Gawker’s noncompliance with the July 20 court order. If you have any questions, please contact me. Je n n i f e r J. M c Gr a t h O f H a r d e r M i r e l l & A b r a m s LLP cc: Charles J. Harder, Esq. Ken Turkel, Esq. Shane Vogt, Esq. LEVINE SULLIVAN K O C H & SC H U LZ, LLP 1899 L Street, NW Suite 200 Washington, DC 20 03 6 (202) 5 0 8-1 100 | Phone (202) 8 6 1-9 888 | Fax Seth D. Berlin (202) 508-1122 sberlin@ lskslaw .com September 17, 2015 VIA ELECTRONIC MAIL Jennifer J. McGrath, Esq. Harder Mirell & Abrams LLP 132 S. Rodeo Drive, Suite 301 Beverly Hills, CA 90212 Re: B o lle a v. C lem , G a w k e r M e d ia , L L C , e t a l.. No. 12012447-CI-011 (Fla. Cir. Ct.) Objections to Financial Worth Discovery Dear Jennifer: I write in response to your letter sent on Friday evening, September 11, 2015 regarding financial worth discovery. Before turning to the substance of your letter, I feel constrained to renew my objection to your firm’s repeated practice of waiting until Friday evenings or Jewish holidays to file motions or send correspondence demanding an immediate response. In this instance, your letter was sent after hours on a Friday evening and demanded a response within two business days, despite the fact that those two days were Rosh Hashanah (the first of which is also a court holiday). This was also unnecessary: your letter relates to discovery responses served some six weeks ago in connection with a trial that is not for six months. Turning to the substance of your letter: Trust Documents. As Mr. Denton explained, under oath at his deposition and in a sworn affidavit, neither Gawker nor he has possession, custody or control of the trust documents you seek. Neither is a party to the trust agreement —neither is the grantor of the shares in the trust, the beneficiary of the trust, or the trustee. I also feel constrained to note that your letter demands all manner of documents that were not included in either the document request at issue or the Court’s order, although that is largely academic in light of the foregoing. Mr. Denton’s Account Statements. Mr. Denton has provided all the required account records that he has or has access to. As both he and we have explained, the few additional statements you seek relate to long-closed accounts for which he no longer has copies or access to obtain copies. Your continued insistence that he somehow locate years-old bank statements for long-dormant accounts is entirely unreasonable. Mr. Denton has readily conceded that he is Washington N e w York P h ila d e lp h ia D enver | LEVINE SULLIVAN I KOCH & SCHULZ, LLP Jennifer J. McGrath, Esq. September 17, 2015 Page 2 worth tens of millions of dollars, so continuing to seek records for closed accounts that once held much more modest sums that are not material to his current financial worth serves no valid purpose in connection with presenting plaintiffs case on that issue. Transfer Pricing Studies. Gawker again confirms its response to RFP No. 140 that it has no non-privileged documents responsive to this Request. Latest Statement for Each Account. Mr. Denton will provide, by February 15, 2016, the account statements for his active accounts for the period ending January 30, 2016. Although you have repeatedly declined our invitations to discuss such matters informally, I am willing to meet and confer about the above at a mutually-convenient time. In that regard, and consistent with my comments above, please note that I will be out of the office on Tuesday and Wednesday, September 22 and 23 in observance of Yom Kippur. Thank you. Sincerely, LEVINEfSULLIVAN KOCH & SCHULZ, LLP cc: Other counsel of record HARDER MIRELL& ABRAMS 1 9 2 5 CENTURY PARK EAST SUITE 8 0 0 LOS ANGELES, CA 9 0 0 6 7 4 2 4 , 2 0 3 , 1 6 0 0 • WWW.HMAFIRM.COM September 17, 2015 VIA EMAIL Seth D. Berlin, Esq. Michael Berry, Esq. Paul J. Safier, Esq. Alia L. Smith, Esq. Levine Sullivan Koch & Schulz, LLP 1899 L Street, NW Suite 200 Washington, DC 20036 Re: Gregg D. Thomas, Esq. Rachel E. Fugate, Esq. Thomas & LoCicero PL 601 S. Boulevard Tampa, Florida 33606 Terry Gene Bollea v. Heather Clem. Gawker Media, LLC, et al Circuit Court of the Sixth Judicial Council in and for Pinellas County, Florida Case Number 120124470-011 Dear Seth: I write in response to your letter dated September 17, 2015. First, we reject your claim that we are imposing unreasonable time periods to respond to correspondence. Presumably, you were already aware of Gawker’s positions with respect to all the matters raised in my letter; therefore, it was certainly reasonable to seek a response within four days of receipt of my letter. (In any event, if you needed a bit of extra time to respond due to your being out of the office, you could have easily requested it as a matter of professional courtesy.) Second, the fact that the trial date is in March does not mean that discovery must be delayed and pushed up against the trial date. In fact, this discovery was first ordered in May, and it is now September and Mr. Bollea still does not have relevant documents on the net worth issue. Third, on the merits of the enumerated discovery issues, we respond as follows: Trust Documents. Gawker and Denton are relying on an over-narrow definition of “control”. We highly doubt that Denton cannot obtain documents relating to his family trust, a trust that has a substantial interest in a multi-million dollar corporation which comprises the bulk of his net worth. Defendants have asserted dubiously narrow definitions of “control” in the past in this litigation (with respect to Kinja documents), and the Court rejected them. The Court has already ordered the production of these documents over Gawker’s and Denton’s objections, and unless your clients agree to comply with this order, we intend to obtain an order that specifically September 17, 2015 S. Berlin Page 2 requires production of documents that Gawker or Denton can obtain from the trust or the trust’s lawyers. Further, the language in my letter regarding the scope of the request is taken directly from Mr. Bollea’s motion papers; the Court granted Mr. Bollea’s motion on this issue in its July 20 order. Mr. Denton’s Account Statements. If Mr. Denton will provide a verified statement under oath that the accounts at issue no longer exist or have zero balances, we will not pursue our motion to compel in reliance on that representation. Transfer Pricing Studies. Your response on this issue is completely at odds with the relevant documentation. The agreement between Gawker and Kinja specifically recites that such a study was done, which it specifically identifies, and further recites that the study was relied on in determining the terms of the agreement. Thus, your claim that no such transfer pricing study exists would mean that Gawker and Kinja made a false representation as a part of a document that resulted in the shipping of millions of dollars every year out of Gawker’s accounts and into Hungary where it can be secreted from creditors and taxation authorities. In short, your claim strains credibility, but if it is in fact true, it has serious implications for whether the transfers to Kinja were fraudulent and those funds should be considered a part of Gawker’s net worth (as well as for proceedings supplementary which may occur to recover those moneys after a judgment is entered). If, in fact, a transfer pricing study was done as Gawker and Kinja stated in their agreement, please reconsider your position and produce it immediately. Latest Statement for Each Account. In reliance on your representation that Mr. Denton will provide the statements for all active accounts for the period ending January 30, 2016, no later than February 15, 2016, Mr. Bollea will not move to compel production of these statements at this time. If you wish to discuss any of these matters, please write or call me no later than the close of business September 21, 2015. If we do not resolve these matters, we will be forced to move to compel and to seek monetary sanctions. Sincerely, Je n n i f e r J. M c Gr a t h Of H a r d e r M i r e l l & A b r a m s LLP cc: Ken Turkel, Esq. (via email) Shane Vogt, Esq. (via email) David Houston, Esq. (via email) LEVINE SULLIVAN K O C H & SC H U LZ, LLP 1899 L S treet, NW S u it c 2 0 0 W a s h i n g t o n , DC 2 0 0 3 6 (2 0 2 ) 508-1 1 00 1P h o n e ( 2 0 2 ) 8 6 1 - 98 8 8 | F a x S e t h D. Ber l i n (2 0 2 ) 5 0 8 - 1 1 2 2 September 21, 2015 VIA ELECTRONIC MAIL Jennifer J. McGrath, Esq. Harder Mirell & Abrams LLP 132 S. Rodeo Drive, Suite 301 Beverly Hills, CA 90212 Re: B o lle a v. C lem , G a w k e r M e d ia , L L C , e t a l., No. 12012447-0-011 (Fla. Cir. Ct.) Objections to Financial Worth Discovery Dear Jennifer: I write in response to your letter sent last Thursday night. To respond to your substantive questions: 1. Transfer pricing study. Gawker has never contended that there was no such study. Rather, it has explained that it has no non-privileged responsive documents. The study, which was prepared by the law firm Mayer Brown, LLP, was included on the privilege log produced by Gawker on March 28, 2014, and Mr. Kidder referenced it, as a privileged document, at his second deposition (April 14, 2015) at pages 144-151. 2. Trust documents. As we and Mr. Denton have explained repeatedly: Mr. Denton is not the grantor of the trust (his father transferred the shares into the trust), he is not the beneficiary of the trust (his niece and nephews are), and he is not the trustee (his sister is). Mr. Denton has no control over the trust, nor does he possess or control the trust documents. See, e.g., Denton Dep. Tr. (June 16, 2015) at 152:9 - 165:9. Although we think it would be illogical to argue that Mr. Denton’s net worth includes shares of GMGI that are in a trust with shares granted by his father, controlled by his sister, and benefiting his niece and nephews, plaintiff remains free to make this non sensical argument to the jury at trial, if the Court permits it. 3. Bank accounts. We believe that Mr. Denton has already testified that the accounts you reference are closed or dormant and have zero balance. See, e.g., Denton Dep. Tr. (June 16, 2015) at 30:15 - 31:3; 37:10-18; 49:21 - 50:14; 104:5-8. Nevertheless, in an effort to avoid further debate or litigation over this non-issue, he will provide a further affidavit confirming this fact. Washington N e w York P hiladelphia D enver LS K S LEVINE SULLIVAN KOCH & SCHULZ, LLP Jennifer J. McGrath, Esq. September 21, 2015 Page 2 As you know, I will be out of the office tomorrow and Wednesday in observance of Yom Kippur. But I should generally be available on Thursday or Friday to discuss the foregoing. Thank you. Sincerely, LEVINE SULLIVAN KOCH & SCHULZ, LLP cc: Other counsel of record Filing # 33069097 E-Filed 10/09/2015 03:26:04 PM Exhibit 8 * * *ELECTRONICALLY FILED 10/09/2015 03:26:05 PM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY*** Th e Gospel According to N ick Denton— W hat Next For Th e Gawter Founder? - Th e Daily Beast 12/15/2014 A n d r e w H u r r e r /B lo a m h e r y / G e tty EMPEROR Lloyd Grove. The Gospel According to Nick Denton—What Next For The Gawker Founder? In a candid interview, the media entrepreneur talks about the future of Gawker, staff changes, The New Republic, and the life-changing importance of coming out. Internet media entrepreneur Nick Denton is a person to whom harsh judgments adhere like barnacles. “There’s no point in writing about Nick if you can’t get to the fundamental data:text/html;charset=utf-8 ,% 3C figure% 20class% 3D % 22hero-media% 22% 20 itemscope% 3D % 22% 22% 20 itemtvpe% 3D % 22http% 3A % 2 F % 2 F s c ^ i j | | C | g ^ ^ . Q Q ^ i j p | 3 12/15/2014 The Gospel According to N ick Denton— What Next For T h e G a w te r Founder? - The D aily Beast problem of his nihilism,” former employee Moe Tkacik once told The N e w Y orker about her boss. “Other people’s emotions are alien to him,” another Denton underling, Choire Sicha, said in the same article. “I think he’s a total dick,” TechCrunch founder Michael Arrington told me back in 2 0 0 8 . “I think he’s amoral. I don’t think he has any sense of right and wrong, and he’ll do anything he can to make money and have a successful blog.” Yet the Nick Denton who greets me at the Nolita headquarters of Gawker Media—the Manhattan startup he founded on a shoestring, but which has grown 1 2 years later into a $ 4 0 million-a-year company with some 3 0 0 employees on five continents—would seem to bear little resemblance to the greedy sociopath of common caricature. “I’m a constructive person,” he insists. “I like to build things. I’m a sand castle building kid who can’t understand why other boys would want to kick the castle down. I hate internal disputes and internal dissention and I will make every effort to eliminate that.” Never mind that Gawker.com, Denton’s original gossip blog, sharpened its teeth on internal disputes, the mockery of the Manhattan media elite, and the kicking-down of castles—an entertainingly brutish sensibility fueled by understandable resentment, given that Denton barely paid his young charges and worked them half to death. (Back when I wrote a column for the New York Daily N e w s, I was a frequent Gawker target; after I lost that job, Gawker reported—not inaccurately—that I “might pass unnoticed, appearing to be any number of undistinguished and fleshy middle-aged white men.” Denton, laughing, says today: “That seems relatively generous.”) Denton, who speaks in the clipped cadence of the Oxford-educated Brit he is, has built quite a castle. The Gawker Media empire consists of eight blogs boasting 1 2 5 million unique visitors per month and devoted to sports (Deadspin ), automobiles (Jaloprdk ), science fiction (io9 ), video games (K otaku ), design and technology (G izm odo ), user-friendly software (Lifehacker ), and women’s interests (Jezebel). data:text/html;charset=utf-8,%3Cflgure%20class%3D%22hero-media%22%20itemscope%3D%22%22%20iterntvpe%3D%22http%3A%2F 0/ o 2 F s c ^ n j| |C |g ^ ^ .Q Q ^ p - ji| 12/15/2014 The Gospel According to Nick Denton— What Next For T h e G a w te r Founder? - Th e D aily Beast Denton talks excitedly of his plans to move Gawker Media’s headquarters next year to a luxuriously renovated building on Fifth Avenue and 1 7 th Street in Manhattan’s Flatiron neighborhood, complete with a two-story entertainment and event venue. “I came out completely to everybody 16 years ago. It changes the climate, it changes the weather, it changes the entire environment.” He has signed a long-term lease for three 1 9 ,0 0 0 -square-foot floors, with plans to defray the enormous rent (around $4 .5 million a year) by subletting one of the floors to another company. “We’ll actually be in the same building as First Look,” Denton says gleefully, referring to eBay billionaire Pierre Omidyar’s troubled media startup, which has been riven by staff shakeups, internal bickering, and firings. “Right now I’m rather afraid that First Look is going to be a small huddle of people in this vast, cavernous space,” Denton adds, not bothering to suppress a giggle. “That’s a major part of Omidyar’s $ 2 5 0 million—it’s a significant chunk of real estate. He’s going to have a hard time. The market is cruel.” valued in the neighborhood of $ 3 0 0 million, though Denton says, “On the open market, if it were for sale—which it isn’t —it’s more like $ 2 0 0 million.” At this point in his life, Denton has enough filthy lucre in his bank account to affect a certain lack of interest in the stuff. “This is not a ‘money-making venture,”’ he insists. “For me, I just like the activity, and the activity just happens to make money.” He scoffs at the suggestion that a large company—in much the same way that AOL purchased Arianna Huffington’s services while swallowing up data:texl/htm l;charset=utf-8,% 3C figure% 20class% 3D % 22hero-m edia% 22% 20item scope% 3D % 22% 22% 20item t>pe% 3D % 22http% 3A % 2F% 2Fsc^nj|.c|g^^.Q Q ^/p-] 5 12/15/2014 Th e Gospel According to N ick Denton— W hat Next For T h e Gawter Founder? - T h e D aily Beast theHuffington P o st for $ 3 1 5 million—could keep Denton on as Gawker’s leader who reports to upper management with the promise of a commensurately gigantic payday. “How manageable do you think I am?” asks Denton, who, after a career as a working journalist for Britain’s Telegraph and Financial Tim es, serendipitously became a Web entrepreneur—and a millionaire—in the late 1 9 9 0 s with the sale of a party and event site called First Tuesday. “I haven’t been managed for a long time,” he says. “I like the culture here. I like my colleagues. I couldn’t imagine a team of executives I would trust and enjoy working with like my colleagues here...I don’t think I could operate in one of those larger and more political organizations.” Denton, who at 4 8 is something of a grand old man of the Web, sports his trademark gray stubble and a muted sweater the color of mushroom soup, as he holds forth in a glass-encased conference room (having evicted two of Gawker Media’s twenty-something Hungarian software developers in town from the Budapest office for an all hands meeting and a holiday party). It’s the day after Denton announced—with a great deal more fanfare in Capital New York and the New York Times than perhaps the news deserved—that he’s giving up the title of president of his company but retaining the title of CEO. It’s the sort of executive tweak that might warrant a business-section headline about a publicly traded media firm 5 0 0 times the size of Denton’s. Yet in a 4 ,1 1 0 -word communique—the W ar and P eace of corporate memos—he outlined a new management structure in which the famously domineering and decisive boss would now share power with six senior Gawker Media executives and run the company by consensus. The memo—sprinkled with decidedly non-corporate words such as “douche” and “fucking”—copped to Denton’s own mistakes and those of others, notably the promotion and subsequent demotion of Gawker Media executive editor Joel Johnson, in a writing style that Denton calls “blunt—but calculatedly blunt.” He doesn’t want to talk about Johnson, an old and possibly former friend who data:text/htm l;charset=utf-8,% 3Cfigure% 20class% 3D% 22hero-m edia% 22% 20item scope% 3D% 22% 22% 20item t>pe% 3D% 22http% 3A% 2F% 2Fsc^T^;c j g ^ ^ . Q Q ^ / j p | g 12/15/2014 The Gospel According to NickDenton— What Next For The Gawker Founder? - Th e Daily Beast Denton believes is angry at him—and Johnson didn’t respond to an email from The Daily Beast. In his memo, Denton wrote, “I made a mistake in Editorial, hiring a talented guy whose voice and vibe I loved, who represented nerd values, and whom I thrust into a job which changed under his feet.” Denton indicated that the Gawker and Gizmodo sites under Johnson’s leadership weren’t making enough noise with well-reported scoops. “I didn’t even think to warn that Gawker is always first about the story,” Denton wrote. “I took that for granted. I was in so much of a hurry that I didn’t even look at other candidates, a cardinal sin. I made a mistake, and I’m sorry to Joel, and I’m sorry to those to whom he is a friend.” Of course, the memo was mostly about Denton, who compared himself to a dead Chinese Communist leader “The fact is,” Denton wrote, “that I would like to end my career as a behind-the-scenes powerbroker, a Deng Xiaoping of Gawker Media, exerting discreet influence through obscure committees. It’s more my style.” He hardly needed to add: “I’m a showman; I do like to make a splash.” In a wide-ranging conversation, Denton dished on competitors, shared his theories on the media business, discussed his pragmatic political views tempered by his pro-life position on abortion rights, confided his hopes to become a parent since his marriage in May to actor Derrence Washington, and explained how coming out as gay 1 6 years ago has informed his thinking about crisis public relations. *On the public hammering being administered to Facebook billionaire and N e w Republic owner Chris Hughes in the wake of last week’s defenestration of longtime TNR editors Franklin Foer and Leon Wieseltier and the mass exodus of nearly all of the others: “Media executives like Chris Hughes—I don’t know whether you’d call Chris Hughes an ‘executive’—p eo p le like Chris Hughes have to remember that before any of the HR rules, you need to remember the number one rule of PR, which is: Get ahead of the story. You have to make sure that your version of the story is ready. You have to talk to your people before they hear from other people and you have to publish before other people publish. A reactive management memo after a story already leaps out—that’s just a mistake. That’s bad practice.” data:text/htm l;charset=utf-8,% 3C figure% 20class% 3D % 22hero-m edia% 22% 20item scope% 3D % 22% 22% 20item t>pe% 3D % 22http% 3A % 2F% 2Fsc^nj^.c|gg^.Q Q ^/f3|7 12/15/2014 The Gospel According to NickDenton— What Next For The Gawker Founder? - Th e Daily Beast *On how Denton acquired his crisis management insights: “It’s partly to do with being out and being gay, and seeing the transformation that takes place. I came out completely to everybody 1 6 years ago. When you realize that if you own your own story, if you say it yourself, it has a transformative effect, and you’re no longer a closeted homo waiting for that moment when somebody is going to call you out, and you actually take that initiative rather than being dragged out. It changes the climate, it changes the weather, it changes the entire environment.” *On the person chosen to replace Frank Foer as TNR’s editor in chief, Gabriel Snyder, who worked for Denton in 2 0 0 9 as Gawker’s top editor: He was “a poor one. He hired some good people, he worked really hard, but he didn’t have any story aggression.” (Snyder didn’t respond to emails from the Daily B east.) *On the recent flap in which a top executive of the Uber ride-sharing network suggested at a private New York dinner that it might be advisable to hire opposition researchers to investigate Uber critic Sarah Lacy, editor of the tech site P andoD aily : “That was such a nonsense scandal. What do you think these PR people, at least the good ones, are doing anyway? They’re dropping ideas for stories, and a good journalist is always looking for people to dish on competitors or dish on enemies—that’s where all the good information is.” As for Lacy—who worked with Michael Arrington at TechCm nch when he was a frequent victim of Denton’s tech biz blog Valley w a g (which these days is folded into Gawker.com)—“I think Arrington’s place has been taken by Sarah Lacy. In terms of somebody whose journalistic power has gone to their head, that makes her a perfect target for satire.” Lacy retorts: “I’ve pretty much run out of things to say about Nick Denton’s obsession with my life. But I guess Uber’s [co-founder] Travis Kalanick will be happy to know there’s always a home for stories about me on Gawker.” *On his abiding love for the United States: “I’m married to an American so I’m staying in America. I’m going to become a citizen, though I have to check out the tax consequences first.” *On his political beliefs, although he doesn’t bother to vote: “My politics are that I like to get things done, so I am centrist and, for obvious reasons, I’m data:texl/htm l;charset=utf-8,% 3Cfigure% 20class% 3D% 22hero-m edia% 22% 20item scope% 3D% 22% 22% 20item tvpe% 3D% 22http% 3A% 2F% 2Fsc^ij|;c | g ^ p f .Q Q ^ ijp |§ The Gospel According to NickDenton— What Next For The Gawker Founder? - Th e Daily Beast 12/15/2014 socially liberal. I don’t really believe that the government—or, in fact, any kind of hierarchical organization—is very good at delivering any kind of service.” As for his views on abortion, “There’s no advantage to me of going there. I don’t have conventional liberal views on abortion, no.” *On the prospect of parenthood: “Probably yes.” *On his philosophy of the digital media business: “The real secret of success is to avoid the herd. This is a new medium. It’s developing pretty rapidly and there are relatively few people who understand it and have a real sense of how everything—mobile, personalization, desktop, interactive comments, blogginghow all these pieces are going to fit together. A lot of people who seem to know what they’re talking about don’t. “And if you spend all your time reading Twitter and the Internet trades, you will veer this way and that, and you’ll be latching on to the latest trends and spouting the latest buzzwords and talking about ‘millennials’ and ‘engagement’ and you’ll lose sight of who you are and end up with soulless properties.” *In defense of nihilism: “Some of our younger staff, particularly on a site like Gawker, can be a little nihilistic. I think with that generation, so many of their hopes have been so dashed that nihilism is really a natural response. Does the Internet make for a better world? Not really. “The Internet has made for as much toxic discussion as it has for mutual understanding. And what were those other hopes? Oh right, Obama. That didn’t really work out for people. And jobs aren’t that plentiful and career paths aren’t there. Even in journalism, the career path from blog to magazine to book to a comfortable life—that doesn’t realty exist. “So, in the young Manhattan intelligentsia, nihilism is actually pretty standard. And one has to fight against that and create some haven for optimism. And that’s really hard to do.” SHARE TWEET POST EMAIL AROUND THE WEB data:text/htm l;charset=utf-8,% 3C figu re% 20class% 3D % 22hero -m edia% 22% 20item scop e% 3D % 22% 22% 20iterrtype% 3D % 22http% aA % 2F% 2Fs(^ij|x^^^f 0 0 4 ^ P l 9 12/15/2014 The Gospel According to NickDenton— What Next For The Gawker Founder? - Th e Daily Beast What Stephen King Wishes He Never Said F KAT I,’ R E 5, A O L , € O VI 7 Ways To Shut Down A Climate Change Denier 'Game of Thrones' Cast Before The Big Show MTV. COM FHAT U K I 5, A O I,,C ( ) M 00#f20 Filing # 33069097 E-Filed 10/09/2015 03:26:04 PM Exhibit 9 * * *ELECTRONICALLY FILED 10/09/2015 03:26:05 PM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY*** Gawter Media Raising M oney- Business Insider 1/28/2015 BUSINESS IN S ID E R Gawker Media Generated $45 Million In Net Revenue Last Year And It's Raising A $15 Million Round Of Debt A ALYSON SHONTELL JAN. 28, 2015, 7:47 AM Nick Denton orders the shrimp linguine. He doesn't look at Balthazar's menu; the media mogul frequents the restaurant and everyone from the hostess to fellow diners knows who he is. Denton personally owns just under 5 0 % Business I aside r of Gawker Nick Denton Media, a company he founded and bootstrapped in the early 2 0 0 0 s, before Facebook was a semi-reliable traffic hose forpublishers and banner ads generated meaningful revenue. Through a I'amilv lnisi. ^ ^ ^ ^ K n s 68% The board currently consists of himself and Gawker's CTO Tom Plunkett, although Denton is looking to add three new, strategic faces to his table. Union Square Ventures' Fred Wilson was one person he considered as an advisor, although they haven't found a way to work together yet. http://vwvw.businessinsider.com/gawter-media-raising-money-2015-1 1/5 1/28/2015 Gawker Media Raising M oney- Business Insider Aside from a casual conversation or two, Denton says he has never been tempted to sell his site, which is worth at least $ 2 5 0 million based on the company's 2 0 1 4 net revenue of $ 4 5 million. But growing Gawker Media hasn't always been easy. Denton admits that while his company's traffic increased 2 0 % last year to almost 5 0 0 million monthly pageviews and 1 3 0 million unique visitors, Gawker wasn't producing its strongest content. "Editorial traffic was lifted but often by viral stories that we would rather mock," Denton lamented in a recent company-wide memo. "We were nowhere on the Edward Snowden affair. We wrote nothing particularly memorable about NSA surveillance. Gadgets felt unexciting. Celebrity gossip was emptier than usual." In a matter of months, Gawker's entire Valleywag editorial team turned over. Gizmodo, which was once a category leader in tech and gadget news, lost key writers and suffered from competition with other up-and-coming publications like The Verge. Annalee Newitz, who ran Gawker's tech blog i09, was recently placed at the helm of a combined iOq and Gizmodo entity to oversee a turn-around. Earlier in 2 0 1 4 , Denton himself felt a little burnt out. He took a sabbatical following his May wedding. But he says he returned refreshed, with an action plan. That action plan included promoting six of his staffers to managing partners; they now share Denton's role at the top of the organization. Heather Dietrick took over Denton's role as Gawker's President; Erin Pettigrew leads Strategy; Tommy Craggs is executive editor of all 8 Gawker websites, including Jezebel and Deadspin; Scott Kidder is COO; Andrew Gorenstein is President of Advertising; Tom Plunkett is CTO. Most business decisions between the seven leaders are now made in a massive group text messaging chain. From a revenue perspective, things at Gawker have never been better. Even Gizmodo, which has stumbled, has played an integral role in the company's e-commerce efforts. Last year, Gawker Media's gross e-commerce revenue exploded to $ 1 0 0 million, netting it about $ 1 0 million, paired with $ 3 5 million in traditional advertising revenue. Gawker's e-commerce product, headed up by long-time employee Erin Pettigrew, primarily places affiliate links in articles about products that can be purchased on sites like Amazon. Skimlinks helps Gawker monetize this referral traffic. Ryan Brown, Gawker's VP of Business Development, says Cyber Monday and Black Friday were "like the Super Bowl" for Gawker's commerce team, which spent months planning ways to promote the best holiday deals. This past Saturday, an Amazon Prime promotion Gawker ran generated 2 5 , 0 0 0 subscriptions. http://www.businessinsider.com/gawter-media-raising-money-2015-1 2/5 Gawker Media Raising M o ney- Business Insider 1/28/2015 Gawker Media Group Revenue Diversification, 2010-2014 $50,000,000 $45,000,000 $40,000,000 $35,000,000 $30,000,000 $25,000,000 $ 20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 2010 2011 Com m erce & Licensing 2012 2013 2014 Direct Advertising Q uicker Media Gawker's revenue over the past few years. E-commerce became meaningful during 2014. Denton has never raised traditional capital from a venture firm or corporation, but his 2 0 1 5 plan does include raising millions of dollars of debt from a few banks and funds. Denton says the amount will be "less than 1 0 % of the company's open-value market of equity," likely $ 1 5 million. And he promises Gawker will still be "beholden to no one." "[The financing is] not particularly aggressive," says Denton. "We've been almost embarrassingly under-leveraged and conservatively run!" Young America Capital is leading the process. http://www.businessinsider.corrVgawter-media-raising-mone^2015-1 3/5 Gawter Media Raising M oney- Business Insider 1/28/2015 90 700 80 600 70 500 60 400 SO ■ Venture Capital Railed (milliom) ■ ComScore Audience (December) 300 30 200 20 100 10 0 0 ( h n v k c r Media The cash will be used to further growth and continue transforming Gawker from a publisher into a platform like Twitter or Facebook. "We will be the first online media company to create its own technology, rather than be reduced to a content provider subject to someone else's algorithm," Denton wrote in his memo. Kinja, which turns every commenter into a blogger, was one innovative attempt to turn Gawker into a platform. This year, Denton is energized by the intersection of mobile messaging and media, and he is eager to figure out how Gawker can create sharable content for phones. He also wants to experiment with new ways to seed, test, and spread content online. While 2 0 1 4 was a year of growth for Gawker, Denton pledges that 2015 will be better. "For a good 1 2 months from the summer of 2 0 1 3 I was variously betrothed, distracted, obsessed by Kinja, off on honeymoon, off on sabbatical. I'm not sorry for that. For ten years, I've danced with this octopus," Denton wrote honestly to his staffers. "I have now a balanced team of partners whose capabilities are widely acknowledged. These are six people I can confide in. I am happy to share power with them. We will be candid with each other. The drift this year: it will never happen again." * Copyright © 2015 Business Insider Inc. All rights reserved. http://www.businessinsider.com/gawter-media-raising-money-2015-1 4/5 1/28/2015 Gawter Media Raising M oney- Business Insider http://www.businessinsider.com/gawter-media-raising-money-2015-1 5/5 Filing # 34351281 E-Filed 11/12/2015 09:30:21 AM IN THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT IN AND FOR PINELLAS COUNTY, FLORIDA TERRY GENE BOLLEA professionally known as HULK HOGAN, Plaintiff, vs Case No.: 12012447-CI-011 GAWKER MEDIA, LLC aka GAWKER MEDIA; et al., Defendants. / OPPOSITION TO PLAINTIFF’S MOTION TO COMPEL ADDITIONAL FINANCIAL WORTH DISCOVERY Defendants Gawker Media, LLC (“Gawker”), Nick Denton and A.J. Daulerio have provided plaintiff with substantial detailed documentation of their financial worth.1 In addition, 1 This includes: Gawker’s income statements for every year since 2011, plus for the period January through April 2015; Gawker’s balance sheets for every year since 2011, plus for the period January through April 2015; Gawker’s statements of cash flow for every year since 2011, plus for the period January through April 2015; Gawker’s statement of accounts receivable; all of Gawker’s federal tax returns since 2011; all of Nick Denton’s federal tax returns since 2011; all available W2 forms for Denton since 2011; lengthy valuation reports (each running to more than 70 pages) of Gawker Media Group, Inc. (“GMGI”), from 2012, 2013, and 2014, by The Brenner Group, an independent third party, each including more than a dozen exhibits containing detailed financial information considered by the Brenner Group in completing its valuation; financial statements of GMGI, audited and/or reviewed by CPA firm of Citrin Cooperman for 2011, 2012, 2013, and 2014; the most recent capitalization table showing ownership interests in GMGI; Gawker’s leases for its former and current office spaces; a 2013 independent appraisal of Denton’s Manhattan condominium, showing its value; a recent mortgage statement for Denton’s condominium showing the amount still owed; recent bank statements for each of the Gawker Defendants’ current accounts, plus end-of-year account statements for each year available back to 2011; stock certificates showing various investments; bank statements showing payments between Gawker and Kinja, KFT; Gawker’s operating agreement; Gawker’s promissory notes and loan statement; compliance certificates submitted by Gawker to Silicon Valley Bank (“SVB”) in connection with Gawker’s loan; the most recent amendment to the loan and security agreement with SVB; Memorandum and Articles of Association for GMGI; various agreements between Kinja and Gawker, including their Intercompany Services Agreement, their License Agreement, and their Development Agreement; the 2009 GMGI stock plan, along with a stock-related board resolution and meeting minutes; and a “pitch book” containing significant financial data. 1 ***ELECTRONIC ALLY FILED 11/12/2015 09:30:21 AM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY*** they answered comprehensive financial worth interrogatories, submitted financial worth affidavits, and answered a wide array of questions during half-day depositions focusing solely on their financial worth. And, even before the Court permitted plaintiffs punitive damages claim and authorized related discovery on financial worth, the financial state of Gawker had been the focus of substantial discovery and depositions in the case. Plaintiff has already twice asked this Court to compel more financial worth information (first at the hearing on May 29, 2015, and again at the hearing on June 29, 2015). In light of the substantial discovery already provided, the Court largely denied both motions. Now, plaintiff has filed yet another motion seeking still more information. His latest motion, however, does not seek documents that provide any additional information about Gawker or Denton’s financial worth. First, plaintiff seeks a report prepared nearly four years ago by Gawker’s tax attorneys offering legal advice. It does not add anything to the substantial information already provided about Gawker’s value and is clearly protected by the attorney-client privilege. Second, plaintiff seeks documents relating to a trust that does not involve either Gawker or Denton. Denton did not establish the trust, was not the grantor of the shares in the trust (his father was), is not the beneficiary of the trust (his niece and nephews are), and is not the trustee (his sister is). The trust documents would not add anything to the parties’ understanding of Denton’s financial worth, and neither Denton nor Gawker possess or has any legal right to obtain those documents. Plaintiffs motion should be denied, and his request for additional depositions (what would be Gawker’s fourth and Denton’s third) and for sanctions should be rejected out of hand. 2 ARGUMENT A. The Economic Analysis Report Is Protected By The Attorney-Client Privilege. Plaintiff argues that he is entitled to obtain an analysis prepared for Gawker in 2011 - almost a year before the publication at issue in this case - by the law firm Mayer Brown, LLP. See Mot. at 4-6. Although Bollea inexplicably has chosen to call this analysis “The Transfer Pricing Study” and claims he was misled because Gawker referred to it as an “Economic Analysis,” id. at 2, 4, the report prepared by Mayer Brown is titled “Economic Analysis of Royalty Payments Between Gawker Media LLC and Blogwire Hungary KFT,” as reflected in one of the exhibits submitted by plaintiff. See Conf. Harder Aff, Ex. A. The Mayer Brown Report contains legal advice about the legal effects of royalty rates Gawker pays to license intellectual property from its sister company, Kinja, KFT. Gawker has withheld this document on grounds of attorney-client privilege ever since plaintiff first requested it more than a year-anda-half ago. Now, plaintiff belatedly claims that Gawker should be ordered to produce it, but the arguments he offers misstate both the facts and the law. First, plaintiff argues that Mayer Brown’s Report is a “valuation of intellectual property,” which is not subject to the attorney-client privilege. Mot. at 3, 5. To make this argument, plaintiff speculates that Gawker is “cloaking non-legal advice . . . by routing it through a law firm,” and that Mayer Brown’s retention was a “‘ghost hiring’ for no other purpose than to [enable Gawker to] create a phony privilege claim.” Id. at 5-6. This outrageous contention that a major law firm conspired with Gawker to concoct a privilege claim - has no foundation whatsoever. In fact, plaintiffs own motion attaches another document that explains the nature of Mayer Brown’s analysis, stating that Mayer Brown “analysed the appropriate arms’ length pricing for the royalty payable by [Gawker] to [Kinja] with respect to” intellectual property3 3 associated with Gawker’s brand. See Conf. Harder Aff., Ex. A, at 1 (Gawker 28910 C) (providing additional information about Mayer Brown’s analysis and the nature of its Report, including that it was based on recognizing the “importance of maintaining an arms’ length relationship and pricing the royalty hereunder in accordance with arms’ length terms”). While Gawker will not waive the privilege by revealing the substance of Mayer Brown’s advice, it will state for the record that the analysis (a) was prepared in December 2011 by Mayer Brown attorney Charles S. Triplett (who had previously served as an attorney in the IRS’s Office of Chief Counsel), and (b) provided Gawker with legal advice under Section 482 of the Internal Revenue Code and regulations interpreting that section, which govern an appropriate arm’s length standard for transactions and allocations between companies that are owned by a common parent corporation. Such advice falls squarely within the attorney-client privilege. See, e.g., In re Grand Jury Subpoena Duces Tecum Dated Sept. 15, 1983, 731 F.2d 1032, 1037 (2d Cir. 1984) (“Tax advice rendered by an attorney is legal advice within the ambit of the privilege.”); New Phoenix Sunrise Corp. v. C.I.R., 408 F. App’x 908, 919 (6th Cir. 2010) (advice provided by outside counsel on tax issues is privileged); Ross v. UKILtd., 2004 WL 67221 (S.D.N.Y. Jan. 15, 2004) (same); U.S. v. Chevron Texaco Corp., 241 F. Supp. 2d also Chevron Texaco Corp., 241 F. Supp. 2d at (N.D. Cal. ^ ^ 1 ) (same); see (“Communications between a client and its outside counsel are presumed to be made for the purpose of obtaining legal advice.”).2 The two cases cited by plaintiff are inapposite. One, Skorman v. Hovnanian o f Florida, Inc., 382 So. 2d 1376 (Fla. 4th DCA 1980) (cited in Mot. at 5), stands for the unremarkable and irrelevant proposition that business advice is not subject to the attorney-client privilege. The other, In re Asousa P ’ship, 2005 WL 3299823 (Bankr. E.D. Pa. Nov. 17, 2005) (cited in Mot. at 5), held that an appraisal done by a valuation company (not a law firm) was not privileged simply because the party’s outside counsel was copied on its transmittal. Id. at *10-11. Here, the Report was prepared by attorneys at Mayer Brown for the purpose of providing legal advice. No other party was involved in the creation of the document, and Mayer Brown was not a “conduit” of any kind. Id. at *4. 4 Second, plaintiff claims that he needs Mayer Brown’s Economic Analysis Report “to determine how the fee Gawker is paying Kinja is calculated.” Mot. at 2. This claim also is not correct. Plaintiff already knows how the fee Gawker is paying Kinja is calculated and how much money is being paid because the formula is set out in the licensing agreement attached to plaintiffs motion. See Conf. Harder Aff., Ex. A at Article VI (GAWKER 28912 C). In addition, Gawker has produced reams of documents detailing the actual dollar amounts it has paid to Kinja since 2011, including its balance sheets and bank records reflecting each of those individual transactions. Plaintiff does not need to invade the privilege of the Mayer Brown Report to understand the amounts that Gawker pays to Kinja, even assuming that plaintiff needs that information at all to assess Gawker’s overall financial worth. Finally, plaintiff misstates the record when he claims that Gawker somehow misled him about the existence of Mayer Brown’s Report. The existence of this Report was not a “recent revelation.” Mot. at 3; see also Mot. at 2 (falsely stating that Report was not “revealed” until July 2015). Gawker disclosed the Mayer Brown Report more than 18 months ago - in March 2014 - when it listed the document on its privilege log. See Mot., Ex. 6. That log stated explicitly that Gawker had withheld as privileged a document titled “Economic Analysis” written by “Mayer Brown LLP” and dated “ 12/11/2011.” Id. Gawker’s corporate representative, Scott Kidder, also referenced the Report in April 2015 at the second of his three depositions. While maintaining the substance of the Report as privileged, Kidder specifically and repeatedly referenced it in his testimony. When asked about the people involved in deciding “the terms of the fee for the royalty agreement between Gawker Media and Kinja,” Kidder explained that “Mayer Brown” was “hired” to prepare “a study to make sure that there were terms appropriate for an arm’s length transaction.” Ex. 1 (Kidder 5 Dep.) at 144:10-17. Kidder further testified that Mayer Brown offered legal advice about “what is an appropriate arrangement.” Id. at 145:2-10. Plaintiff was not misled about the Report. He simply chose not to inquire further about it on either of these occasions. His belated effort to compel the Report’s production now - and then to conduct a fourth deposition of Gawker as a result - should be rejected. The Report is both privileged and has no bearing on plaintiffs ability to assess Gawker’s financial worth. B. Denton Does Not Have Possession, Custody or Control of the Trust Documents, and They Are Unnecessary In Any Event. Plaintiff next argues that the Court should compel Gawker and Denton to produce certain trust documents that do not involve either of them and that are not under their control. The trust was established by Denton’s father, who created the trust for the benefit of his grandchildren (Denton’s niece and nephews) and named Denton’s sister as the trustee. Denton is not involved in the trust at all. See Ex. 2 (Affidavit of Nick Denton, attesting that he is “not a trustee or beneficiary of the trust” and “do[es] not control it”); see also Conf. Harder Affi, Ex. B at 153:20-22, 154:6-7 (Denton testifying about trustee and beneficiaries). Simply stated, Denton was not the grantor/creator of the trust (his father was), he is not a beneficiary of the trust (his •> nieces and nephews are), and he is not the trustee (his sister is). Given these undisputed (and indisputable) facts, plaintiffs argument for seeking to compel the trust documents misses the mark. His motion should be denied for at least two reasons. •> Plaintiff misstates the record by claiming that Denton “transferred [the shares] into the trust.” Mot. at 7. Denton never testified that he established the trust or transferred the shares into the trust - in fact, plaintiffs counsel never asked those questions. Moreover, during the deposition, Denton’s counsel objected to plaintiffs counsel’s use of the term “grantor” in her questions, expressing his concern that Denton might “get tripped up on the meaning of that legal term.” Conf. Harder Affi, Ex. B at 152:20 - 153:3. 6 First, the trust documents plaintiff seeks are not within Denton’s possession, custody, or control. It is uncontested that Denton does not possess or have custody of the trust documents. As Denton has attested under oath, “I do not have the documents memorializing the trust.” Ex. 2; see, e.g., Discovery, Civ. Prac. FL-CLE, § 16.67 (“it is clear that a party may not be required to produce matters the party does not have”) (citing Fritz v. Norflor Constr. Co., 386 So. 2d 899 (Fla. 5th DCA 1980)). This is consistent with the brief exchange between the Court and Denton’s counsel at a prior hearing, in which the Court expressed its view that “[sjomewhere along the way, he would have a record if it’s his,” and Denton’s counsel explained that “It’s not his. That’s what I’m saying.” Ex. 3 (June 29, 2015 Hrg. Tr.) at 135:19-22; see also id. at 135:16-18 (“MR. BERLIN: Well, I don’t know that he has any documents to give, Your Honor, because he’s not the trustee; he’s not the beneficiary.”).4*7 Denton also does not have control over the documents. The Florida Supreme Court has interpreted “control” to mean that a party has “the authority to gain access to the records.” S. Bell Tel. & Tel. Co. v. Deason, 632 So. 2d 1377, 1388 (Fla. 1994) (emphasis added); see also Discovery, Civ. Prac. FL-CLE, § 16.67 (“The concept of ‘control’ has generally been held to mean the legal right to obtain the requested documents.”). Likewise, the Eleventh Circuit has explained that “[cjontrol is defined not only as possession, but as the legal right to obtain the documents requested upon demand.” Searock v. Stripling, 736 F.2d 650, 653 (11th Cir. 1984) (emphasis added); accord Fin. Bus. Equip. Solutions, Inc. v. Quality Data Sys., Inc., 2008 WL 4 In that same vein, while the Court granted plaintiffs motion to compel plaintiffs requests related to trust documents, those requests were limited to any trust in which Denton “personally” was the “grantor, settlor, trustee, beneficiary or in which [he has] or had any interest,” Ex. 4 at 13 (Financial Worth RFP to Denton No. 42), or “any . . . trusts in which YOU have an interest,” id. at 11 (Financial Worth RFP to Denton No. 33). Plaintiffs contention that these requests extend to trusts in which Denton is uninvolved, or that Denton should be sanctioned for not producing documents he does not have, is not well taken. 7 4663277, at *2 n.5 (S.D. Fla. Oct. 21, 2008).5 Here, plaintiff has made no factual or legal showing that Denton has a “legal right” to obtain records concerning a trust for which he was not the grantor and of which he is neither the trustee nor the beneficiary. While the law requires a party to produce documents maintained by his agents (such as, for example, his attorney or his publicist), plaintiff has cited no case suggesting that a party has the legal authority to demand that his relatives give him their documents. Instead, plaintiff claims that Denton has the “practical ability to obtain the materials sought on demand,” and therefore he must do so. Mot. 7-8 (quoting Costa v. Kerzner Int’l Resorts, Inc., 277 F.R.D. 468, 471 (S.D. Fla. 2011)). Plaintiffs claim is based on a mischaracterization of both the law - the cited case deals with entities within a corporate family - and Denton’s deposition testimony. Denton never said that he could obtain the trust documents. Rather, as the deposition excerpts attached to plaintiffs motion plainly show, when asked “when the trust was created” and when his “family actually acquired the shares” in the trust, Denton explained that he thought he could “get that information.” Conf. Harder Aff., Ex. B at 158:7-15. Plaintiff never asked whether, and Denton certainly never testified that, he could or would obtain the trust documents. In any event, “the fact that a party could obtain a document if it tried hard enough and maybe if it didn’t try hard at all does not mean that the document is in its possession, custody, or control; in fact it means the opposite.” Chaveriat v. Williams Pipe Line Co., 11 F.3d 1420, 1427 (7th Cir. 1993).5*8 5 “When construing Florida Rules of Civil Procedure, Florida courts may look to federal case law construing similar or identical Federal Rules of Civil Procedure, such as this case where Florida Rule of Civil Procedure 1.350(a) is similar to Federal Rule of Civil Procedure 34(a).” Saewitz v. Saewitz, 79 So. 3d 831, 834 n.3 (Fla. 3d DCA 2012) (citing Ferrigno v. Yoder, 495 So. 2d 886, 887-88 (Fla. 2d DCA 1986)). 8 Finally, trust documents in which Denton is not involved would not shed any additional light on his financial worth. Plaintiff claims that the trust documents are necessary to establish that Denton’s own shares of GMGI are worth more if has “a controlling interest” in GMGI. Mot. at 7. Although the Gawker Defendants believe that it makes no sense to argue that Denton is worth more because of assets held by family members, plaintiff remains free to make this argument at trial. The point of that argument is that those family members (his niece and nephews) also own shares of the company, but that fact is both undisputed and already the subject of sworn deposition testimony and substantial other evidence. As a result, the actual trust documents, which Denton does not have, are entirely unnecessary for plaintiff to be able to make his argument. C. Plaintiffs Request for Additional Depositions Is Baseless. In addition to seeking more documents, plaintiff also asks the Court to require Gawker and Denton to appear for more depositions - a third deposition of Denton, and a fourth deposition of Scott Kidder, Gawker’s corporate representative. But the Court, on June 29, 2015, rejected plaintiffs earlier request for this same relief. Ex. 3 ( June 29, 2015 Hrg. Tr.) at 139:16 (THE COURT: “We’re done with depositions.”). Nothing has changed. Gawker and Denton have already provided extensive testimony and documents about their financial worth at multiple depositions, and further depositions are neither necessary nor justified. Plaintiff also argues that he should get additional depositions because Gawker produced certain documents after the financial worth depositions. Putting aside the fact that this argument was already rejected by this Court on June 29, his argument ignores the facts that plaintiff waited until just before the discovery cut off to seek punitive damages and to ask for financial worth discovery, and that the Gawker Defendants facilitated that discovery even before the punitive 9 damages motion was adjudicated. Moreover, both the Mayer Brown study and the trust involving Denton’s extended family were well known to plaintiff long before the financial worth depositions were conducted. Plaintiff should not be able to sit on his hands, have the Court deny an earlier request for additional depositions, and then be able to move once again for the same, already-rejected relief. D. Plaintiffs Request for Fees/Sanctions Is Frivolous. Plaintiff argues that the Gawker Defendants should be subject to sanctions because they are “obstructing discovery” by (1) having “buried” the Mayer Brown Economic Analysis Report, even though Gawker listed it on its privilege log and it was the subject of deposition testimony by its corporate designee, and (2) failing to produce trust documents that Denton does not have. Mot. at 8. For the reasons stated above, these arguments are baseless as a matter of fact and law. As a result, and as more generally explained in the Gawker Defendants’ Opposition to Plaintiffs Motion for Attorneys’ Fees and Costs in connection with 15 prior discovery motions, plaintiffs fee request is without merit. CONCLUSION For the foregoing reasons, plaintiffs motion should be denied in its entirety. Dated: November 12, 2015 THOMAS & LOCICERO PL By: /s/ Gress D. Thomas____ Gregg D. Thomas Florida Bar No.: 223913 Rachel E. Fugate Florida Bar No.: 0144029 601 South Boulevard P.O. Box 2602 (33601) Tampa, FL 33606 Telephone: (813) 984-3060 Facsimile: (813) 984-3070 athomas@tlolawlirm.com rfuaate@tlolawfirm.com 10 Seth D. Berlin Pro Hac Vice Number: 103440 Michael Sullivan Pro Hac Vice Number: 53347 Michael Berry Pro Hac Vice Number: 108191 Alia L. Smith Pro Hac Vice Number: 104249 Paul J. Safier Pro Hac Vice Number: 103437 LEVINE SULLIVAN KOCH & SCHULZ, LLP 1899 L Street, NW, Suite 200 Washington, DC 20036 Telephone: (202) 508-1122 Facsimile: (202) 861-9888 sberlin@lskslaw.coin mberrv@lskslaw.com msullivan@lskslaw.eom asmith@lskslaw.com psafier@lskslaw.com Counsel for Gawker Media, LLC and Nick Denton 11 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 12th day of November, 2015,1 caused a true and correct copy of the foregoing to be served via the Florida Courts’ E-Filing Portal on the following counsel of record: Kenneth G. Turkel, Esq. David Houston, Esq. Law Office of David Houston kturkel@BajoCuva.com Shane B. Vogt, Esq. dhonslon@houslonallaw.coni shane.vout@BaioCuva.com 432 Court Street Reno, NV 89501 Tel: (775) 786-4188 Bajo Cuva Cohen & Turkel, P.A. 100 N. Tampa Street, Suite 1900 Tampa, FL 33602 Tel: (813)443-2199 Fax: (813)443-2193 Charles J. Harder, Esq. charder@HMAfirm.com Douglas E. Mirell, Esq. dmirell@HMAfirm.com Jennifer McGrath j mcgrath@HMAfirm.com Harder Mirell & Abrams LLP 132 South Rodeo Drive, Suite 301 Beverly Hills, CA 90212-2406 Tel: (424) 203-1600 Fax: (424) 203-1601 Attorneys for Plaintiff /s/ Gress D. Thomas Attorney 12 Filing #34351281 E-Filed 11/12/2015 09:30:21 AM EXHIBIT 1 TO OPPOSITION TO PLAINTIFF’S MOTION TO COMPEL ADDITIONAL FINANCIAL WORTH DISCOVERY ***ELECTRONIC ALLY FILED 11/12/2015 09:30:21 AM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY*** SCOTT KIDDER - 4/14/2015 Page 1 IN THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT IN AND FOR PINELLAS COUNTY, FLORIDA ---------------------------------- x TERRY GENE BOLLEA, professionally know as HULK HOGAN, -against- Plaintiff, Case No. 12012447 CI-011 HEATHER CLEM, GAWKER MEDIA, LLC AKA GAWKER MEDIA; GAWKER MEDIA GROUP, INC. AKA GAWKER MEDIA; et al., Defendants. --------------------------------------------------------------- x April 14, 2015 1 0 : 1 2 a . m. Videotaped Deposition of SCOTT KIDDER, taken by Plaintiff, pursuant to Notice, at the offices of Merrill Corporation, 1345 Avenue of the Americas, New York, New York, before William Visconti, a Shorthand Reporter and Notary Public within and for the State of New York. Merrill Corporation 800-826-0277 www.deposition.com/southern-California.htm SCOTT KIDDER - 4/14/2015 Page 2 1 2 3 4 5 A P P E A R A N C E S : HARDER MIRELL & ABRAMS LLP Attorneys for Plaintiff 1925 Century Park East, Suite 800 Los Angeles, CA 90067 BY: 6 7 8 9 10 11 CHARLES J. HARDER, ESQ. charder0hmafirm.com LEVINE SULLIVAN KOCH & SCHULZ, LLP Attorneys for Defendants 1899 L. Street, NW Washington, DC 20036 BY: ALIA L. SMITH, ESQ. asmith01skslaw.com 12 13 14 15 ALSO PRESENT: ADAM KOWALCZYK, Videographer HEATHER L. DIETRICK, Gawker Media 16 17 18 19 20 21 22 23 24 25 Merrill Corporation 800-826-0277 www.deposition.com/southern-California.htm SCOTT KIDDER - 4/14/2015 Page 144 1 SCOTT KIDDER 13:08:26 2 13:08:29 3 13:08:29 4 13:08:33 5 13:08:35 6 13:08:38 7 13:08:43 8 13:08:48 9 13:08:49 Q. 10 Who are the individuals who decided 13:08:56 11 the terms of the fee for the royalty agreement 13:09:03 12 between Gawker Media and Kinja? 13:09:05 13 A. So again, what I can say there is 13:09:09 14 an outside company or law firm actually I know it 13:09:12 15 happened to me, Mayer Brown was hired and they did 13:09:14 16 a study to make sure that there were terms 13:09:17 17 appropriate for an arm's length transaction. 18 was handled by counsel and beyond that I don't 13:09:25 19 think there is anything unprivileged that I can 13:09:27 20 say. 13:09:29 21 Q. So just so I understand. It 13:09:22 The terms 13:09:34 22 of the royalty agreement between Gawker Media LLC 13:09:38 23 and Kinja KFT were determined by the law firm 13:09:42 24 Mayer Brown & Platt and not between principals or 13:09:50 25 officers at Gawker Media or Kinja? Merrill Corporation 800-826-0277 www.deposition.com/southern-california.htm SCOTT KIDDER - 4/14/2015 Page 145 1 2 SCOTT KIDDER A. 13:09:51 No, that is not what I said. I 13:09:53 3 said that in the interest of trying to give you 13:09:55 4 some information that is that, that there was an 13:10:00 5 outside law firm did a study that said, hey, what 13:10:04 6 are some appropriate -- what is an appropriate 13 : 10 : 06 7 arrangement of what is an appropriate fee for an 13:10:08 8 arm's length transaction if you two weren't owned 13:10:11 9 by the same parent, is this sort of the thing that 13:10:15 would happen. 13:10:16 10 In terms of the signatories of the 11 13:10:18 12 agreement, in Kinja and Blogwire would be the then 13:10:23 13 managing director and in the U.S. it would have 13:10:25 14 been an authorized signatory. 13:10:27 15 the top of my head and who it was. 16 individuals that I have to imagine would have 13:10:32 17 actually agreed on the terms. 13:10:33 18 Q. I don't know off Those are the I'm asking for your actual 13:10:30 13:10:37 19 knowledge not your assumption. 20 attorneys at the Mayer Brown law firm, what other 13:10:44 21 individuals were involved in determining the 13:10:48 22 license fee in the royalty agreement between 13:10:51 23 Gawker Media and Kinja KFT? 13:10:53 24 25 A. Other than Other than who the signatories are which I just... Merrill Corporation 800-826-0277 www.deposition.com/southern-california.htm 13:10:40 13:10:59 SCOTT KIDDER - 4/14/2015 Page 277 1 SCOTT KIDDER 2 THE VIDEOGRAPHER: 1 7 :25:02 Here marks the end 1 7 :25:05 3 of file number 8 in the videotape deposition 1 7 :25:07 4 of Scott Kidder. 1 7 :25:11 5 the time is 5:25 p.m. 6 We are going off the record (TIME NOTED: 1 7 :25:14 5:25 P.M.) 7 9 SCOTT KIDDER 10 11 Subscribed and sworn to before me 12 t h i s ______day o f _________ , 2015 13 14 15 16 17 18 19 20 21 22 23 24 25 Merrill Corporation 800-826-0277 www.deposition.com/southern-California.htm SCOTT KIDDER - 4/14/2015 Page 278 1 2 3 C E R T I F I C A T E STATE OF NEW YORK 4 5 ) : ss. COUNTY OF NEW YORK ) 6 7 I, WILLIAM VISCONTI, a Shorthand Reporter 8 and Notary Public within and for the State of New 9 York, do hereby certify: 10 That SCOTT KIDDER, the witness whose 11 deposition is hereinbefore set forth, was duly sworn ~l2 by me and that such deposition is a true record of 13 the testimony given by the witness. I further certify that I am not related to 14 15 any of the parties to this action by blood or 1 A' 1b marriage, and that I am in no way interested in the 17 outcome of this matter. IN WITNESS WHEREOF, I have hereunto set my 18 19 hand this 22^ day of f t 1 r 2015. 20 21 22 23 WILLIAM VISCONTI 24 25 800-826-0277 Merrill Corporation www.deposition.com/southern-calif ornia.htm Filing #34351281 E-Filed 11/12/2015 09:30:21 AM EXHIBIT 2 TO OPPOSITION TO PLAINTIFF’S MOTION TO COMPEL ADDITIONAL FINANCIAL WORTH DISCOVERY ***ELECTRONIC ALLY FILED 11/12/2015 09:30:21 AM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY*** CONFIDENTIAL IN THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT IN AND FOR PINELLAS COUNTY, FLORIDA TERRY GENE BOLLEA professionally known as HULK HOGAN, Plaintiff, Case No.: 12012447-CI-011 vs. HEATHER CLEM; GAWKER MEDIA, LLC aka GAWKER MEDIA; et al.. Defendants. _______________ ________________ / AFFIDAVIT OF NICK DENTON I, Nick Denton, hereby declare under penalty of perjury that the following is true and correct to the best of my knowledge, information and belief. 1. The statements made in this Affidavit are based on my personal knowledge. 2. I submit this Affidavit in connection with court’s ruling on June 29, 2015, regarding additional financial worth discovery in response to plaintiffs “Motion to Compel Full and Complete Financial Worth Discovery” (“Plaintiffs Motion”). 3. I verify that I do not have insurance on my Manhattan condominium (other than the coverage provided on the entire building generally by the condominium association). I verify that I do not have insurance on the contents of my Manhattan condominium. 4. I verify that the bank statements and related information being produced herewith represent all the documents responsive to the requests numbered 7, 8, 23, 24, 28, and 29 in Plaintiff s Motion that I have been able to access or otherwise locate after a diligent search. The screenshot of text messages shows the current currency balances of my Citibank account. 1 CO NFIDENTIAL 5. I verify that I do not have the documents memorializing the trust that is the subject of request number 32 in Plaintiffs Motion. As I testified at my deposition, I am not a trustee or beneficiary of the trust, nor do I control it. dnton STATE OF NEW YORK COUNTY OF NEW YORK The foregoing Affidavit of Nick Denton was SWORN TO AN D SUBSCRIBED before CL-Jj. more t h i s d a y of July, 2015. Notary Public, State of New Y o r k ; KAVITHA REDDY NOTARYPUBLICSTATEOF NEWYORK NEW YORK COUNTY 2 Filing #34351281 E-Filed 11/12/2015 09:30:21 AM EXHIBIT 3 TO OPPOSITION TO PLAINTIFF’S MOTION TO COMPEL ADDITIONAL FINANCIAL WORTH DISCOVERY ***ELECTRONIC ALLY FILED 11/12/2015 09:30:21 AM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY*** 1 IN THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT IN AND FOR PINELLAS COUNTY, FLORIDA CIVIL DIVISION TERRY GENE BOLLEA, p r o f e s s i o n a l l y known as HULK HOGAN, Plaintiff, Case No. 12-012447-CI-011 VS . HEATHER CLEM; GAWKER MEDIA, LLC, a ka GAWKER MEDIA, et a l ., Defendants. / HEARING BEFORE THE HONORABLE PAMELA A.M. CAMPBELL DATE: June 29, 2015 TIME: 9 : 29 a.m. PLACE: P i n e l l a s County Court house 545 1 s t A v e n u e N o r t h Third Floor St. Petersburg, Florida REPORTED BY: Aa r o n T. P e r k i n s , RPR Notary Public, S ta te of F l o r i d a a t Large Pages 1 t o to 1 2 : 4 0 p. m. 151 Riesdorph Reporting Group, Inc. (813) 222-8963 2 1 APPEARANCES: 2 3 4 5 6 7 8 9 10 11 CHARLES J. HARDER, ESQUIRE JENNIFER J. McGRATH, ESQUIRE Harder, Mirell & Abrams, LLP 1925 Century Park East Suite 800 Los Angeles, California 90067 and KENNETH G. TURKEL, ESQUIRE SHANE B. VOGT, ESQUIRE Bajo Cuva Cohen & Turkel, P.A. 100 North Tampa Street Suite 1900 Tampa, Florida 33602 Attorneys for Plaintiff 12 13 14 15 APPEARANCES CONTINUED: 16 17 18 19 20 21 22 23 24 25 Riesdorph Reporting Group, Inc. (813) 222-8963 1 2 APPEARANCES CONTINUED AS FOLLOWS: 3 4 5 6 7 8 9 10 11 12 13 14 GREGG D. THOMAS, ESQUIRE Thomas & LoCicero, PL 601 South Boulevard Tampa, Florida 33606 and SETH D. BERLIN, ESQUIRE MICHAEL D. SULLIVAN, ESQUIRE Levine Sullivan Koch & Schulz, LLP 1899 L Street, N.W. Suite 200 Washington, D.C. 20036 and MICHAEL BERRY, ESQ U IR E PAUL J . S A F IE R , ESQ U IR E Levine Sullivan Koch & Schulz, LLP 1760 Market Street Suite 1001 Philadelphia, Pennsylvania 19103 15 16 Attorneys for Defendant Gawker Media, LLC, et al. 17 18 19 20 21 22 23 ALSO PRESENT: Heather L. Dietrick, President and General counsel for The Gawker Media Group Alison Steele, Esquire Rahdert, Steele & Reynolds, P.A. 535 Central Avenue St. Petersburg, Florida 33701 Anna M. Phillips, Tampa Bay Times 24 25 Riesdorph Reporting Group, Inc. (813) 222-8963 135 1 luxury car. 2 something else. 3 into another bank account that we don't know 4 about. 5 Maybe he actually went out and bought THE COURT: Maybe he transferred that money So at this point I'm going to 6 deny it. 7 the eve of the trial. 8 you wouldn't have been entitled to it, but it's 9 too late at this point. 10 I just think that is a lot to produce on All right. Otherwise, I'm not saying So No. 32, Mr. Denton's 11 irrevocable family trust documents, any additional 12 argument? 13 14 MR. BERLIN: These aren't Mr. Denton's documents. 15 THE COURT: 16 MR. BERLIN: I will grant it. Well, I don't know that he has 17 any documents to give. Your Honor, because he's 18 not the trustee; he's not the beneficiary. 19 20 21 22 THE COURT: Somewhere along the way, he would have a record if it's his. MR. BERLIN: It's not his. That's what I'm saying. 23 THE COURT: Well, see what you produce, then. 24 All right. Reports and notes of pitch 25 meetings and meetings held with prospective Riesdorph Reporting Group, Inc. (813) 222-8963 139 1 the written valuation, it was explored in the 2 financing. 3 provided. 4 kind of presentation. Power Point presentation, 5 whatever kind of presentation materials there 6 were, provide it, presentation materials to be 7 provided. 8 9 I denied that, that it's already been I will just say this. MR. BERLIN: If there is some Your Honor, it's my understanding, because we have already asked YAC 10 that question, that we have an answer to that, but 11 I'm happy to go back and look at it some more. 12 13 THE COURT: Okay. I think that's it other than the potential further depositions, right? 14 MR. VOGT: Yes, Your Honor. 15 THE COURT: And so I think at this point in 16 time, we're done with depositions. So it looks 17 like you-all were doing lots of depositions. 18 think it was last week when I looked at the 19 docket. 20 very hard, and I really appreciate you-all working 21 really hard. 22 too, so let's hopefully get some rest on that 23 aspect of it. I I know that you-all have been working But I think you-all need some sleep 24 Okay. So additionally for today? 25 MR. BERLIN: Your Honor, would you like for Riesdorph Reporting Group, Inc. (813) 222-8963 151 1 REPORTER'S CERTIFICATE 2 3 4 STATE OF FLORIDA COUNTY OF HILLSBOROUGH 5 6 7 8 9 I, Aaron T. Perkins, Registered Professional Reporter, certify that I was authorized to and did stenographically report the above hearing and that the transcript is a true and complete record of my stenographic notes. 10 11 12 13 14 I further certify that I am not a relative, employee, attorney, or counsel of any of the parties, nor am I a relative or employee of any of the parties' attorney or counsel connected with the action, nor am I financially interested in the action. 15 16 Dated this 29th day of June, 2015. 17 18 19 20 21 22 23 Aaron T. Perkins, RPR 24 25 Riesdorph Reporting Group, Inc. (813) 222-8963 Filing #34351281 E-Filed 11/12/2015 09:30:21 AM EXHIBIT 4 TO OPPOSITION TO PLAINTIFF’S MOTION TO COMPEL ADDITIONAL FINANCIAL WORTH DISCOVERY ***ELECTRONIC ALLY FILED 11/12/2015 09:30:21 AM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY*** Filing # 26813568 E-Filed 05/01/2015 05:41:12 PM IN THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT IN AND FOR PINELLAS COUNTY, FLORIDA TERRY GENE BOLLEA professionally known as HULK HOGAN, Plaintiff, vs. Case No. 12012447CI-011 HEATHER CLEM; GAWKER MEDIA, LLC aka GAWKER MEDIA; GAWKER MEDIA GROUP, INC. aka GAWKER MEDIA; GAWKER ENTERTAINMENT, LLC; GAWKER TECHNOLOGY, LLC; GAWKER SALES, LLC; NICK DENTON; A.J. DAULERIO; KATE BENNERT, and BLOGWIRE HUNGARY SZELLEMI ALKOTAST HASZNOSITO KFT aka GAWKER MEDIA, Defendants. / PLAINTIFF’S REQUESTS FOR PRODUCTION OF DOCUMENTS CONCERNING NET WORTH TO DEFENDANT NICK DENTON Pursuant to Florida Rules of Civil Procedure 1.350, Plaintiff Terry Gene Bollea, professionally known as Hulk Hogan (“PLAINTIFF”), hereby requests that Defendant Nick Denton produce for inspection and copying each of the documents or categories of documents described hereafter at the law offices of Bajo Cuva Cohen & Turkel, P.A., 100 North Tampa Street, Suite 1900, Tampa, Florida 33602. Pursuant to the provisions of Florida Rule of Civil Procedure 1.350, you are required to produce the documents requested below, numbered 1 through 92 within thirty days from the certificate of service. 33. For the time period beginning January 1,2011, to the time of the response to this Request, any DOCUMENTS RELATING TO or reflecting the existence or location of any pensions, profit sharing, annuities or trusts in which YOU have any interest. 34. For the time period beginning January 1, 2011, to the time of the response to this Request, any and all DOCUMENTS showing any and all ownership and/or other interests YOU hold, for yourself personally and/or on behalf of GAWKER, KINJA or GMGI, in real estate (including both ownership and leasehold interests), any interests in other businesses, and/or any other form of investment, including without limitation DOCUMENTS sufficient to show the fair value and/or fair market value or worth of any and all such interests. 35. All DOCUMENTS REFERRING or RELATING TO any real property leased to or from YOU (individually, jointly, or otherwise), for yourself personally and/or on behalf of GAWKER, KINJA or GMGI, during any part of the period of January 1, 2011 to the time of the response of this Request, including DOCUMENTS sufficient to show the terms of all such leases, the location of the property(ies), the amount of rent paid, the owner of the property(ies) and the duration of the lease(s). 36. DOCUMENTS sufficient to show any and all ownership interests YOU hold (individually, jointly, or otherwise, for yourself personally and/or on behalf of GAWKER, KINJA or GMGI) in any and all real property from January 1, 2011 to the time of the response to this Request, including but not limited to, copies of any and all titles and/or deeds regarding such real property, and all DOCUMENTS stating and/or estimating the fair value and/or fair market value of any and all such real property. 37. DOCUMENTS sufficient to show whether any real property owned by YOU (either individually, jointly, or otherwise, for yourself personally and/or on behalf of GAWKER, 11 42. Copies of all trusts in which YOU, yourself personally and/or on behalf of GAWKER, KINJA or GMGI, are or were the grantor, settlor, trustee, beneficiary or in which YOU have or had any interest, legal or equitable, at any time from January 1, 2011, until the time of the response to the Request. 43. Copies of any testamentary documents which may govern the disposition of YOUR assets upon YOUR demise including, without limitation, wills and testamentary trusts. 44. Copies of any prenuptial agreements to which YOU are a party. 45. Copies of any currency, stock certificates or other DOCUMENTS or items YOU keep in a safe or similar apparatus, regardless of the location of such safe or apparatus for yourself personally and/or on behalf of GAWKER, KINJA or GMGI. 46. All DOCUMENTS showing the source of funds YOU have used to pay any monthly expenses since January 1, 2011. 47. All DOCUMENTS showing any on-line auctions or other purchases or sales of any property valued at more than $1,000 in which YOU have participated since 2011. 48. For the time period beginning January 1,2011, to the time of the response to this Request, all DOCUMENTS REFERRING or RELATING TO the finances of GAWKER, including without limitation all articles (print media and/or online), emails, internal memos, monthly reports, financial reports and/or financial statements. 49. For the time period beginning January 1,2011, to the time of the response to this Request, all DOCUMENTS REFERRING or RELATING TO the revenue streams and/or income of GAWKER, including without limitation all articles (print media and/or online), emails, internal memos, monthly reports, financial reports and/or financial statements. 13 91. DOCUMENTS sufficient to show all assets and/or activities of GAWKER that provided any benefit to YOU, KINJA and/or GMGI at any time from January 1, 2011 to present. 92. DOCUMENTS sufficient to show all assets and/or activities of GMGI that provided any benefit to YOU, KINJA and/or GAWKER at any time from January 1, 2011 to present. DATED: May 1,2015 /s/ Kenneth G. Turkel_____________ Kenneth G. Turkel Florida Bar No. 867233 Shane B. Vogt Florida Bar No. 0257620 BAJO | CUVA | COHEN | TURKEL 100 North Tampa Street, Suite 1900 Tampa, Florida 33602 Tel: (813)443-2199 Fax: (813) 443-2193 Email: kturkel@baiocuva.com Email: svogt@bajocuva.com -andCharles J. Harder, Esq. PHVNo. 102333 Douglas E. Mirell, Esq. PHVNo. 109885 Sarah E. Luppen, Esq. PHVNo. 113729 HARDER MIRELL & ABRAMS LLP 1925 Century Park East, Suite 800 Los Angeles, CA 90067 Tel: (424) 203-1600 Fax: (424) 203-1601 Email: charder@limafirm.com Email: d m irc11@hma II rm.com Email: sluppen@hinafirin.com 21 Filing # 34453809 E-Filed 11/13/2015 05:20:13 PM EXHIBIT A (to Plaintiffs Second Amended Notice of Hearing) ***ELECTRONICALLY FILED 11/17/2015 01:49:12 PM: KEN BURKE, CLERK OF THE CIRCUIT COURT, PINELLAS COUNTY*** Tampa 601 South Boulevard, Tampa. FL 33606 ph 813-984-3060 fax 613-384-3070 toll free 866-395-7100 h i, t s a a. c v _____ __ __ Lo [ C E South Florida 401 SE 12th Street. Sle 300. Fort Lauderdale, FL 3331c ph 954-703-3416 fax 954-400-5415 8461 Lake Worth Roaa, St=. 114, Lake Wortti, FL 33467 ph 561-34C-1433 fax 561-340-1432 4rrov [blavhpjt,com Gregg D. Tliomas Direct Dial: (813) 984-3066 gthomas@tlolawfirm .com Reply to: Tampa June 26, 2015 VIA HAND DELIVERY The Honorable Pamela A.M. Campbell Sixth Judicial Circuit St, Petersburg Judicial Building 545 First Avenue N., Room 300 St, Petersburg, FL 33701 Re: Terry Gene Bollea v. Gawker Media, I.LC, et al. Case No.: S:12-cv-02348-JL)W-TBM Deai- Judge Campbell: Enclosed for your review, in advance of Monday’s hearing, is the Publisher Defendants' Opposition to Plaintiffs Motion to Compel Additional Financial Worth Discovery, plus exhibits. (Plaintiffs motion was filed Monday afternoon, June 22, 2015.) Also enclosed is a binder containing much of the financial worth discovery that the Publisher Defendants have provided in this case. Thank \ou for vour attention. Sinecrelv. THOMAS & LOCJC.ERO PL 11 5 Alt ofNiek Deaton’s federal tax returns since 2011 IDomea0(Tv-U'T 3X1-?77J 6 All of AJ. DaulerioA available federal tax returns since 2011 [AJD0 3 9 - S S J 7 All available W2 forms for Nick Denton and A.J. Daulerio since 2011 8 [ G r a k e r 2850I-2S 5I 1] 1 j i i Valuation reports of Gawker Media Group, Inc. (“GMGI"), by The Brenner Group, from 2012. 2013. and 2014, plus exhibits 9 [D e m o n 1 0 4 -3 2 0 ] Financial statements of GMGI audited and/or reviewed by CPA firm of Citrin Cooperman for 2011,2012 and 2013 10 (G a w k e r 2 4 3 4 8 -2 4 3 S 8 ] Capitalization table showing ownership interests in GMGI [D em o n 11 104] Capitalization table showing ownership interests in RGFree, Inc., the start-up web publishing company recently founded by AJ, Daulerio 12 [A JD 069] Gawker’s leases 13 IG a w k e r 2 8 2 3 8 - 2 8 4 8 0 ] Independent appraisal ofNick Denton’s condominium 14 | D e m o n 0 2 9 -6 7 ] Mortgage statement for Nick Denton [D em o n 0 0 7 ) 15 Bank statements f o r each o f the Publisher Defendants (most recent statements, plus end-of-year account statements for each year available back to 2011) [ G a w k e r 2 8 6 5 7 - 2 8 7 4 1 ] [ D e n t o n 01 6 - 0 2 S ] [ A J D 5 6 - 6 0 . 6 6 - 6 8 J 16 Stock certificates showing investments [Gawker 2 8 7 5 6 - 2 8 7 5 9 ] |A J D 0 6 I - 6 5 J 17 Bank statements showing payments between Gawker and Kinja, KFT 18 IG a w k e r 243S 9 - 24378] Gaw'ker’s operating agreement F G .m k e r — 2S4S7J Gawker's promissory notes and loan statement to k c r:^ : 19 :o