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Alex Jones estate to be liquidated to pay Sandy Hook debt

Evan Ochsner, Bloomberg News on

Published in News & Features

Alex Jones’ personal bankruptcy was converted to a formal liquidation, meaning a trustee will decide how Jones will pay down $1.5 billion in defamation judgments.

Jones and families of Sandy Hook Elementary School shooting victims who he defamed have for months been unable to agree on how he will pay them. The families won their state defamation judgments against the right-wing conspiracy theorist and his media platform, Infowars, after he repeatedly called the 2012 school shooting a hoax.

At a hearing in Houston Friday, U,S. Bankruptcy Judge Christopher Lopez said Jones’ case doesn’t trigger any exceptions to the law that would bar it from being converted to a Chapter 7 liquidation. Lopez declined a request from Sandy Hook families to include provisions laying out how the handover of Jones’ case to a trustee will proceed.

Later in the hearing, Lopez threw out the separate bankruptcy proceeding of Infowars’ parent, Free Speech Systems LLC, entirely. The families can now pursue their judgments against Free Speech in state court.

Lopez appeared to reject implications from Jones that the judge would also shut down Infowars itself.

“I was never asked to shut down a show today, that was never going to happen,” Lopez said.

“This is one of the more difficult cases I’ve had,” the judge added. He appeared to get emotional as he ruled on the Free Speech case, seemingly in light of its connection to the 2012 massacre in which a school shooter left 26 people, most of whom were children, dead.

The trustee appointed to oversee Jones’ case now has an interest in Free Speech, Lopez reminded creditors.

“We’re not leaving things into the wind here,” Lopez said.

Defamation to Bankruptcy

Lopez ruled last year that Jones couldn’t discharge the defamation debt through bankruptcy because Jones’ conduct was intentional and malicious.

 

The defamation verdicts out of Connecticut and Texas state courts pushed Free Speech into Chapter 11 in July 2022. Jones filed his own personal bankruptcy in December 2022. Lopez has overseen both bankruptcies.

Jones and his creditors in December 2023 filed competing plans in his personal bankruptcy, and in the months since have been unable to agree on a consensual path forward, even with the help of a mediator. In February, creditors voted in favor of a plan that would liquidate Jones’ assets. Jones earlier proposed a plan to keep his media company running.

Jones and Sandy Hook families in recent weeks coalesced around the idea that Jones should convert his case to a Chapter 7. But the issue of the Free Speech case remained in dispute before Lopez ruled on Friday afternoon.

Even if Infowars is liquidated, Jones could potentially start a successor broadcast, Kyle J. Kimpler, of Paul, Weiss, Rifkind, Wharton & Garrison LLP, said on behalf of some of the Sandy Hook families during the hearing.

Those families, who hold the vast majority of the $1.5 billion in judgments, had asked Lopez to convert the Free Speech case to a Chapter 7 liquidation, while a group holding a smaller chunk of the debt wanted it dismissed so they could pursue their collection attempts in state court. Lopez ultimately determined dismissing that case was in the best interest of creditors and the estate.

Crowe & Dunlevy PC represents Jones. Cain & Skarnulis PLLC, Koskoff Koskoff & Bieder PC, and Paul, Weiss, Rifkind, Wharton & Garrison LLP represent the Connecticut families. Willkie Farr & Gallagher LLP and Lawson & Moshenberg PLLC represent the Texas families. Akin Gump Strauss Hauer & Feld LLP represents unsecured creditors.

The case is Alexander E. Jones, Bankr. S.D. Tex., No. 22-33553, 6/14/24.

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(Randi Love and James Nani contributed to this report.)

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©2024 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.

 

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