Alex Jones's Lawyers 'Splain To Bankruptcy Judge That Putting The Kibosh On State Tort Claims Is His Real Job

Bold strategy, Cotton!

The Bilderberg Group Arrive In Watford

(Photo by Oli Scarff/Getty Images)

Last Friday, bankruptcy lawyer Kyung Shik Lee chastised the Sandy Hook plaintiffs for whining about being deprived of their day in court.

“This allows a resolution to the bickering that has been going on for years…(but) I hear nothing but complaining by those who want the money or those who are entitled to the money,” he huffed in US Bankruptcy Judge Christopher Lopez’s Victoria, Texas courtroom.

And by “bickering,” he means filing lawsuits to recover for the damages inflicted after Jones called the grieving parents “crisis actors,” precipitating years of harassment and death threats from his deranged audience.

On the eve of a trial to determine damages, Jones placed three LLCs in bankruptcy, halting the court proceedings in Connecticut and Texas. All the major listed creditors are tort litigants, and the Jones entities have made no bones that they are using the bankruptcy court to manage the litigation liability.

“The bankruptcy code and courts are the appropriate vehicle” for resolving “a sad and complex situation,” Lee told the court last week, adding that there are “limited funds and we’re trying to maximize it so it goes to the plaintiffs.” And by “limited funds” he means the $10 million Jones has agreed to contribute over five years to roughly 20 plaintiffs if and only if they agree to drop their claims against him and his main company Free Speech Systems, which earned $56 million last year.

“We’re turning to the bankruptcy courts to compel the plaintiffs to estimate the value of their claims in open court by discernible evidentiary standards,” Alex Jones’s lawyer Norman Pattis told the Wall Street Journal on Wednesday, conveniently ignoring the fact that the Texas plaintiffs were prevented from “estimat[ing] the value of their claims in open court” when Monday’s trial was canceled due to the timely Chapter 11 filing.

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“The plaintiffs have turned this litigation into a macabre morality play and have refused to negotiate in good faith,” he continued indignantly. “We hope they will show respect to the federal courts.”

Let’s not linger on the clanging irony of the attorney who participated in discovery so egregiously non-compliant that it netted his client death penalty sanctions in two states lecturing the opposing parties on respect for the judiciary.

In court, the plaintiffs pointed out that, per the declaration of the Chief Restructuring Officer Marc Schwartz, the Jones entities don’t engage in any business and only recently began collecting a monthly royalty on the Infowars trademark.

I have learned that the Debtor[s] have no purpose other than to hold assets which may be used by other entities. They undertake no business activities, they do not sell, rent or lease to others anything. Their assets do not generate any income for them. They have no bank accounts and do not pay money to anyone for any reason. They have no debt or other liabilities other than those related to pending or potential litigation. For these reasons, they have no financial statements or books of account and they do not file income tax returns.

US Bankruptcy Trustee Kevin Epstein filed a strident objection to the emergency motion to appoint trustees for Jones’s proposed Litigation Settlement Trust, arguing that the companies aren’t entitled to file under subchapter V at all. The plaintiffs agreed, and Judge Lopez seemed somewhat skeptical of Infowars’s position.

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So the companies filed this memorandum defending the propriety of a subchapter V filing. See if you can spot the slippage.

The Debtor InfoW is the defendant in a series of lawsuits in Texas and Connecticut stemming from certain statements made by Alex Jones and has been litigating those claims for the last 10 years.

InfoW LLC isn’t “the defendant” the Sandy Hook lawsuits — it’s one of several defendants, including Alex Jones and Free Speech Systems, both of which are cashing in on the “get out of trial free” card provided by this bankruptcy without having to disclose their substantial assets.

“They want the benefit of bankruptcy without being in bankruptcy,” plaintiffs’ attorney Randy Williams told the Connecticut Post. “Mr. Jones and (FSS) are staying outside of it but that is not right; they are getting the advantage of keeping that case from going forward on Monday, and our folks are waiting to liquidate their claims.”

There’s also the minor matter that these claims weren’t filed until 2018, so, while the plaintiffs have been mourning their dead children for a decade, they’ve only been getting d*cked around by Alex Jones’s lawyers for four years.

The memorandum relies on a 2021 order by Judge Lopez holding that a company which owned a waste heat facility still qualified to file under subchapter V even though it was not operational at the time of the filing. By Infowars’s logic, taking steps to prepare three passthrough companies with approximately no assets for bankruptcy makes the Jones LLCs “businesses” for the purpose of the statute. Ipso facto expecto patronum they are just like a power-generating company which held both real and tangible property and had multiple employees.

It remains to be seen whether Judge Lopez will be persuaded by this pellucid logic. There’s also the minor matter that the waste heat company was actually trying to liquidate the business and hadn’t made multiple public admissions that it was merely using the bankruptcy court as a litigation tool to evade jury trials in multiple states.

The next hearing is at 3pm local time on Friday, by which time at least one set of plaintiffs will likely have filed a motion to dismiss and or remand the claims to state court to begin the jury trial. Listen in yourself at (832) 917-1510, Conference Code 590153, or wait for us to tell you about it on Monday. Should be a rager!

Alex Jones didn’t file for bankruptcy ahead of Newtown trial because it could ‘harm his ability to sell merchandise’> [Connecticut Post]
InfoW, LLC (22-60020) [Bankruptcy Docket, via Court Listener]
IWHealth, LLC (22-60021) [Bankruptcy Docket, via Court Listener]
Prison Planet TV, LLC (22-60022) [Bankruptcy Docket, via Court Listener]


Liz Dye lives in Baltimore where she writes about law and politics.