Bankruptcy

SHOCKER: Sandy Hook Plaintiffs Say Alex Jones May Not Have Been Entirely Truthful In Infowars Bankruptcy Filing

What an astonishing turn of events, said no one ever.

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Demonstrators Protests At Texas State Capitol Against Governor’s Stay At Home Order

(Photo by Sergio Flores/Getty Images)

Last night Alex Jones’s bankruptcy lawyers — OH SORRY the lawyers for the three LLCs controlled by him which filed for bankruptcy for the express purpose of preventing a jury from assessing damages in the lawsuits brought by surviving family members of Sandy Hook shooting victims — proposed a schedule to dispose of all litigation claims.

Spoiler Alert: They want it done yesterday.

“One of the goals of the [Plan Support Agreement] is to have all the creditors of the Debtors be paid in full,” they write with a straight face. Which is no mean feat when you’ve prevented a jury from putting price tag on the damages and are offering just $10 million over five years for twenty-odd plaintiffs who have been trying to get their day in court for almost four years now.

Jones, who claims to have spent $10 million on his own legal fees, is proposing to fob the Sandy Hook plaintiffs off with a pittance that wouldn’t even compensate their attorneys for chasing him around for years on end as he ducked discovery, earning himself death penalty sanctions in two states.

We probably shouldn’t be surprised that the guy who paid himself more than $20 million between 2018 and 2021, has the chutzpah to claim that putting three worthless LLCs in Chapter 11, staying the state tort claims, is the fairest way to ensure that the plaintiffs get “paid in full.” We are, after all, talking about someone who sent his attorneys in to court to argue that he was too sick to be deposed  at the very moment he was in studio calling for Anthony Fauci’s execution on his podcast.

And yet!

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Unsurprisingly, the Sandy Hook litigants do not consider this bankruptcy the appropriate vehicle to ensure their payment “in full.” The Connecticut and Texas plaintiffs each made their case before US Bankruptcy Judge Christopher Lopez last Friday that the three Jones entities are not proper small business debtors under subchapter V, and that the entire bankruptcy is a sham to evade a jury assessment of damages against Jones’s main company, Free Speech Systems, which earned $56 million last year alone.

Judge Lopez promised to consider their arguments if they put them in motion form, and the Connecticut plaintiffs were first past the post with an emergency motion to dismiss the case and an objection to the subchapter V designation.

Pointing to the declaration by Jones’s own Chief Restructuring Officer Marc Schwartz, they argue that “none of the Debtors engage in business activities; maintain financial records; submit tax returns; generate income; or have any debts or liabilities other than those relating to the litigation discussed below. They have no employees, limited to no assets, no cash flow, no available source of income to sustain a plan of reorganization, and no creditors other than those relating to the litigation discussed below,” adding that, “These filings were initiated by Alex Jones (Jones) so that he and his wholly owned and controlled entity, Free Speech Systems, LLC (FSS), would obtain the benefit of the automatic stay without filing for bankruptcy.”

They also made an interesting point about the Jones LLCs, which may not even hold the right to the trademarks which they claim as their “business.”

Debtors contradict their own chief restructuring officers’ sworn declaration when they state they “are engaged in the business of holding the legal assets and the website necessary for the family business to operate.” But a search on the USPTO’s Trademark Electronic Search System shows Free Speech Systems, LLC as the owner of 28 marks including, among many others, Prison Planet, Infowars, The Alex Jones Show, and Infowars Life. None of the Debtors were listed as owners of any registered marks.

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The Connecticut plaintiffs conclude by asking the court to dismiss the Chapter 11 filings for cause, and refuse to participate in an effort to “subvert the bankruptcy process for the benefit of Jones and FSS at the expense of legitimate creditors such as Movants.”

Friday’s hearing should be delightful.

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.

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