The Onion's bid for Alex Jones' Infowars hangs in the balance as judge orders new hearing

[November 26, 2024]  By DAVE COLLINS

A bankruptcy judge on Monday delayed a hearing in conspiracy theorist Alex Jones’ effort to stop the satirical news outlet The Onion from buying Infowars, keeping the auction sale up in the air for at least another few weeks.

Jones alleges fraud and collusion marred the bankruptcy auction that resulted in The Onion being named the winning bidder over a company affiliated with him. A trustee overseeing the auction denies the allegations and accuses Jones of launching a smear campaign because he didn't like the outcome.

U.S. Bankruptcy Judge Christopher Lopez had been scheduled to hear an emergency motion to disqualify The Onion's bid on Monday, but put it off until either Dec. 9 or Dec. 17. That's also when the judge will hear arguments on the trustee's request to approve the sale of Infowars to The Onion. Lopez said it made sense to have one hearing on both requests.

“I want a fair and transparent process and let’s just see where the process goes," Lopez said.

Lopez could ultimately allow The Onion to move forward with its purchase, 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.

Jones continues to broadcast his show from the Infowars studio, but he has set up a new location, websites and social media accounts as a precaution. The trustee shut down the Austin studio and Infowars' websites for about 24 hours last week after The Onion was announced as the winning bidder, but allowed them to resume the next day, drawing more complaints from Jones.

Jones declared bankruptcy and liquidated his assets after he was ordered to pay nearly $1.5 billion to relatives of victims of the Sandy Hook Elementary School shooting in Newtown, Connecticut. He was ordered to pay damages for defamation and emotional distress in lawsuits in Connecticut and Texas after he repeatedly said the 2012 shooting that killed 20 first graders and six educators was 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.

Last year, Lopez ruled that $1.1 billion of the Sandy Hook judgments could not be discharged in the bankruptcy. On Monday, he denied a request from Sandy Hook families to make the full $1.5 billion not dischargeable, meaning the debt cannot be wiped clean.

Also Monday, lawyers for the social media platform X objected to any sale of the accounts of both Jones and Infowars, saying X is the owner of the accounts and it has not given consent for them to be sold or transferred. Jones' personal X account, with 3.3 million followers, was not part of the auction, but Lopez will be deciding if it should be included in the liquidation.

Jones has praised X owner Elon Musk on his show and suggested that Musk should buy Infowars. Musk has not responded publicly to that suggestion and was not among the bidders.
 
Jones was permanently banned from Twitter in 2018 for abusive behavior, but Musk restored Jones’ account on the platform he has since renamed X in December last year.

Right-wing conspiracy theorist Alex Jones speaks outside the federal courthouse after a bankruptcy hearing Friday, June 14, 2024, in Houston. (AP Photo/David J. Phillip, File)

Jones alleges The Onion’s bid was the result of fraud and collusion involving many of the Sandy Hook families, the humor site and the court-appointed trustee.

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.

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 from among the two sealed bids that were submitted.

Jones called the auction “rigged” and a “fraud” on his show, which airs on the Infowars website, radio stations and Jones' X account. He filed a counter lawsuit last week against Murray, The Onion's parent company and the Sandy Hook families in the bankruptcy court.

In a court filing on Sunday, Murray called the allegations a “desperate attempt” to delay the sale of Infowars to The Onion and accused Jones, his lawyers and attorneys for First United American Companies of a “vicious smear campaign lobbing patently false accusations.” He also alleged Jones collaborated with First United American Companies to try to buy Infowars.

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.

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. Another auction of remaining assets is set for Dec. 10.

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

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

Documents filed in court this year say Jones had 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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