Alex Jones bankruptcy trustee plans to wind down Infowars

[June 25, 2024]  By Dietrich Knauth

NEW YORK (Reuters) - A court-appointed bankruptcy trustee on Sunday signaled his intent to shut down Alex Jones' Infowars company, but said he wants to prevent a "money grab" by families who have sued Jones over his lies about the deadly 2012 Sandy Hook school shooting.

The trustee, Christopher Murray, said that he has begun "planning to wind-up [Infowars owner Free Speech Systems'] operations and liquidate its inventory" in an effort to repay some of the $1.5 billion that Jones owes to the relatives of 20 students and six staff members killed in the 2012 mass shooting at Sandy Hook Elementary School in Newtown, Connecticut.

But that effort has been imperiled by some of the families' recent efforts to collect on their debts, according to Murray, who was appointed to sell Jones' assets on June 14.

Two of the Sandy Hook parents, Neil Heslin and Scarlett Lewis, had sought a court order that would allow them to seize FSS’s cash, and Murray asked U.S. Bankruptcy Judge Christopher Lopez to block that from happening.

"The specter of a pell-mell seizure of FSS's assets, including its cash, threatens to throw the business into chaos, potentially stopping it in its tracks," Murray wrote. "The Trustee seeks this Court's intervention to prevent a value-destructive money grab and allow an orderly process to take its course."

FSS's chief restructuring officer testified on June 14 that the company had over $6 million in cash and about $1 million in unsold inventory, mostly health supplements.

FSS was dismissed from bankruptcy on the same date that Murray was placed in charge of Jones' finances. The dismissal allowed the company to continue broadcasting, but also allowed its creditors to resume collection efforts.

Infowars founder Alex Jones speaks to the media after appearing at his Sandy Hook defamation trial at Connecticut Superior Court in Waterbury, Connecticut, U.S., October 4, 2022. REUTERS/Mike Segar/File Photo

An attorney for Heslin and Lewis could not immediately be reached for comment.

Before Free Speech Systems was dismissed from bankruptcy, the Sandy Hook families were divided on what should happen to the company.

Families who sued Jones in Connecticut argued the company should be shut down immediately, to prevent Jones from hiding the company's cash or working to undermine the company from the inside. Families who sued Jones in Texas argued instead that he would pay more in the long run if he kept control of his business instead of "selling it for scraps."

Jones filed for bankruptcy protection in December 2022 after courts in Connecticut and Texas ordered him to pay $1.5 billion to the Sandy Hook families for his repeated claims that the Sandy Hook killings were staged with actors as part of a government plot to seize Americans' guns. Jones has since acknowledged that the shooting occurred.

Jones was unable to reach a bankruptcy settlement with the families, and the judge overseeing his bankruptcy ruled that Jones could not use bankruptcy to wipe out the debt, because the legal judgments resulted from Jones' "willful and malicious" conduct.

(Reporting by Dietrich Knauth)

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