Judge in Alex Jones' bankruptcy to hear arguments on The Onion's bid for Infowars

[November 25, 2024]  By DAVE COLLINS

A bankruptcy judge is set to hear arguments Monday in conspiracy theorist Alex Jones ’ effort to stop the satirical news outlet The Onion from buying Infowars and turning it into a parody.

Jones alleges fraud and collusion marred the bankruptcy auction in which The Onion was named the winning bidder on Nov. 14 over a company affiliated with him.

It's not clear how soon U.S. Bankruptcy Judge Christopher Lopez in Houston will issue a ruling. He could allow The Onion to move forward with the sale, order a new auction or name the other bidder as the winner. At stake is whether Jones gets to stay at Infowars’ studio in Austin, Texas, under a new owner friendly to him, or whether he gets kicked out by The Onion.

The other bidder, First United American Companies, runs a website in Jones’ name that sells nutritional supplements.

Regardless, Jones has set up a new studio, websites and social media accounts that would allow him keep airing his show. And his personal account with 3.3 million followers on the social platform X was not part of the sale, although Lopez will be deciding whether it should be included in the liquidation and sold off later.

Jones' bankruptcy and the liquidation of his assets came about after he was ordered to pay nearly $1.5 billion to relatives of victims of the Sandy Hook Elementary School shooting in Newtown, Connecticut. Jones was found liable for defamation and emotional distress damages in lawsuits in Connecticut and Texas for repeatedly calling the 2012 shooting that killed 20 first graders and six educators a hoax staged by actors to increase gun control.

Proceeds from the liquidation are to go to Jones creditors, including the Sandy Hook families who sued him.

Jones alleged The Onion’s bid was the result of fraud and collusion involving many of those families, the humor site and a court-appointed trustee who is overseeing the liquidation.

First United American Companies submitted a $3.5 million sealed bid, while The Onion offered $1.75 million in cash. But The Onion's bid also included a pledge by Sandy Hook families to forgo some or all of the auction proceeds due to them to give other creditors a total of $100,000 more than they would receive under other bids.

The trustee, Christopher Murray, said that made The Onion's proposal better for creditors and he named it the winning bid. He has denied any wrongdoing.

Jones and First United American Companies claimed that the bid violated Lopez’s rules for the auction by including multiple entities and lacking a valid dollar amount. Jones also alleged Murray improperly canceled an expected round of live bidding and only selected among the sealed bids that were submitted.

Right-wing conspiracy theorist Alex Jones speaks to the media after arriving at the federal courthouse for a hearing in front of a bankruptcy judge, Friday, June 14, 2024, in Houston. (AP Photo/David J. Phillip, File)

Jones called the auction “rigged” and a “fraud” on his show, which airs on the Infowars website, radio stations and Jones' X account.

In a court filing, Murray called the allegations “a disappointed bidder’s improper attempt to influence an otherwise fair and open auction process.”

Lopez’s September order on the auction procedures made a live bidding round optional. And it gave broad authority to Murray to conduct the sale, including the power to reject any bid, no matter how high, that was “contrary to the best interests” of Jones, his company and their creditors.

But at a Nov. 14 hearing Lopez said he was concerned about the process and transparency.

“We’re all going to an evidentiary hearing and I’m going to figure out exactly what happened,” he said. “No one should feel comfortable with the results of this auction.”

The assets of Infowars' parent company, Free Speech Systems, that were up for sale included the Austin studio, Infowars' video archive, video production equipment, product trademarks, and Infowars' websites and social media accounts.

Jones is appealing the $1.5 billion in judgments citing free speech rights, but has acknowledged that the school shooting happened.

Jones has brought in millions of dollars a year in revenue by hawking nutritional supplements, clothing, survival gear and other merchandise — including more than $22 million this year through Sept. 30 from his Infowars Store website, according to court documents.

Many of Jones’ personal assets, including real estate as well as guns and other personal belongings, also are being sold as part of the bankruptcy.

Documents filed in court earlier this year said Jones has about $9 million in personal assets, while Free Speech Systems had about $6 million in cash and more than $1 million worth of inventory.

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