Government

Alex Jones Pays Himself $18M, Declares Bankruptcy, Offers Sandy Hook Plaintiffs Change He Found In Couch At Infowars Studio

Subtle.

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Alex Jones of InfoWars (Photo by Drew Angerer/Getty Images)

Alex Jones’s media companies filed for Chapter 11 bankruptcy protection this weekend, effectively halting the lawsuits filed against them by surviving family members of the Sandy Hook shooting.

When Jones referred to the victims as “crisis actors” on his podcast, the plaintiffs suffered years of harassment by Jones’s demented audience. After years of refusing to comply with discovery, Jones was hit with “death penalty” sanctions in two separate cases, one in Texas, and the other in Connecticut. The only issue remaining is how big a check he’ll have to cut, and he’s already managed to infuriate the judge and get himself further sanctioned in Connecticut by claiming he was too sick to be deposed, while simultaneously going to the office to film his show.

Last week, the Texas plaintiffs filed a lawsuit under the Texas Uniform Fraudulent Transfer Act (TUFTA) alleging that Jones has already looted his company by siphoning off $72 million, with $18 million going directly into his own pocket and another $54 million paid to “shell companies owned by insiders like his parents, his children, and himself.”

So the bankruptcy filings, originally flagged by Fortune should probably be interpreted less as a statement of the podcaster’s financial health and more as a litigation strategy. Indeed, all but one of the 20 largest listed creditors for the InfoW LLC, IWHealth LLC, and Prison Planet TV LLC is a Sandy Hook plaintiff, and the application to appoint accountant Marc Schwartz as chief restructuring officer makes clear that the bankruptcy is primarily a vehicle to settle the defamation suits before they get to a jury.

The Debtors’ financial distress stems primarily from statements of Jones and other employees of FSS in the wake of the December 14, 2012, mass shooting at Sandy Hook Elementary School in which 20 children and 6 educators were killed by Adam Lanza. Various parents of the deceased victims of the Sandy Hook shooting assert, among other things, that these statements were defamatory and inflicted emotional distress.

Mistakes were made, the petition continues. Perhaps even by Jones’s own lawyers. But the only solution is for the bankruptcy court to immediately halt all the litigation and force the plaintiffs to accept whatever table scraps Jones left in the companies’ coffers.

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Some of the defendants have faced and been hit with “death penalty” discovery sanctions. Whether these problems were the result of bad faith or merely the lack of someone with the adequate experience and ability, a qualified financial professional answering to independent fiduciaries to wit, the Litigation Settlement Trustees, is necessary for any negotiations that will result in a consensual plan that provides for payment in full to creditors.

“The litigation between the Sandy Hook Plaintiffs and the defendants has been acrimonious, littered with sanctions, and rages on unabated year after year,” Jones argues, conveniently omitting to mention who was responsible for the three-year delay and which party got sanctioned.

Instead he tut-tuts that his generous offer of $120,000 for each of the 13 plaintiffs in Connecticut — an amount which wouldn’t even cover their legal fees, as Jones knows full well, since he claims to have already spent upwards of $10 million to defend himself in the two lawsuits — was summarily rejected.

“There is no reasonable prospect of a resolution which allows for a fair distribution of recoveries to all affected parties,” the motion continues, seeking to cast the company as seeking an equitable resolution for all parties. A noble savior, if you will, seeking to prevent a “race to the courthouse” whereby the Texas plaintiffs liquidate the company’s (already liquidated) coffers before the Connecticut plaintiffs get their day in court.

Wouldn’t the interests of justice be best served if Jones just set aside $2,725,000 in a Litigation Settlement Trust and spared them the trouble of asking a jury to assess their damages?

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Sure, between 2018 and 2021 Alex Jones took $18 million out of Free Speech Systems, effectively the parent company for the debtor companies. But the Sandy Hook plaintiffs should get fobbed off with $100,000 a piece, right?

Sounds legit!

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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