NEW YORK (Reuters) - Billionaire Peter Thiel on Wednesday abandoned his effort to buy the irreverent news website Gawker.com, enabling the Silicon Valley venture capitalist to avoid a possible legal fight over his having secretly funded litigation that led to its demise.

PayPal co-founder and Facebook board member Peter Thiel delivers his speech on the U.S. presidential election at the National Press Club in Washington, U.S., October 31, 2016. REUTERS/Gary Cameron

A proposed settlement between Thiel Capital LLC and a liquidator for Gawker Media LLC was filed with the U.S. bankruptcy court in Manhattan. It requires a judge’s approval.

Thiel, who bid for Gawker’s assets on Jan. 10, also agreed to release claims against an eventual buyer and authors of articles on the website, as well as not fund new litigation against Gawker over its archives.

Lawyers for the liquidator, William Holden, said in court papers it would be “time-consuming and costly” to keep investigating Thiel’s role in Gawker’s demise, and that settling was best for the bankruptcy estate and creditors.

A representative for Thiel could not immediately be reached for comment.

The accord clears the way for a sale of Gawker’s remaining assets, including domain names and nearly 200,000 archived articles, and end its nearly two-year bankruptcy.

Thiel had funded Hulk Hogan’s lawsuit against Gawker after it published a video showing the former professional wrestler, whose real name is Terry Bollea, in a sexual encounter with the wife of a former friend, radio host Bubba the Love Sponge.

Bollea won a $140 million judgment against Gawker in March 2016, precipitating its bankruptcy filing three months later.

He later settled for $31 million, and is also entitled to 45 percent of the proceeds from asset sales, court papers show.

Thiel said in May 2016 he helped fund Bollea’s lawsuit because publishing the video invaded the wrestler’s privacy.

Nine years earlier, Gawker had published an article identifying Thiel as gay, which he also considered a privacy invasion.

The settlement lets Thiel keep paying Bollea’s legal bills.

Thiel, 50, worth $2.5 billion according to Forbes magazine, was also an early investor in Facebook Inc and co-founded the payment service company PayPal Inc.

Univision Holdings Inc, the Spanish language broadcaster, bought many Gawker assets, including the Deadspin sports website and feminist blog Jezebel, for $135 million in 2016.

The case is In re Gawker Media LLC, U.S. Bankruptcy Court, Southern District of New York, No. 16-11700.