Alex Jones' Infowars shutdown looms as some Sandy Hook families seek to collect company assets immediately
A federal bankruptcy judge is holding a hearing Thursday on whether to temporarily stop Sandy Hook victims' families who are trying, without delay, to collect assets from conspiracy theorist Alex Jones' media company as it is poised to be sold off.
The request to block those parents was initiated by court-appointed trustee Christopher Murray, who is overseeing the liquidation of Jones' estate. He accused certain families in an emergency filing Sunday of attempting a "value-destructive money grab" while he has yet to conclude "an orderly wind-down" and sale of the company, Free Speech Systems.
Murray said 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, to the detriment of the interests of the chapter 7 estate for which the Trustee is responsible."
He is asking Judge Christopher Lopez of the Southern District of Texas to implement a 90-day pause on the ability for families and other creditors to collect from the sale of assets, including the liquidation of the company's inventory.
The latest legal dispute has exposed a rift between the Sandy Hook Elementary School families who filed a defamation lawsuit in Texas, where Jones resides, and in Connecticut, where the massacre unfolded in 2012. A gunman killed 20 first grade children and six adults.
In 2022, the families in the two lawsuits were collectively awarded $1.5 billion after claiming Jones defamed them and inflicted emotional distress by repeatedly suggesting on his Infowars platform, which is operated by Free Speech Systems, that the shooting was a hoax.
But none of the families have been able to collect money from Jones, who has said he can't afford that big a sum and filed for bankruptcy in the wake of the verdicts.
On June 14, Lopez ruled that Jones' bankruptcy filing can be converted into a liquidation of his personal assets to help pay off the defamation verdicts, but the judge also dimissed a separate bankruptcy case for Free Speech Systems, finding that "creditors are better served in pursuing their state court rights," rather than through the federal bankruptcy court.
The decision to dismiss Free Speech Systems' bankruptcy case was also favored by Jones, who is continuing to broadcast on Infowars, although he has suggested in recent weeks that he may have to shut down his show in its current form if his company is sold.
In the wake of Lopez's decision, the Sandy Hook families in the Texas lawsuit asked a state district court judge to compel Free Speech Systems to turn over "all money," including "money held in any bank accounts or being controlled by any other third parties at the direction" of the media company.
The move was opposed by Murray as well as the Connecticut plaintiffs, who worry all of the families will have to fight over Jones' assets.
"To be clear, the Connecticut Families support an orderly liquidation of FSS's assets and pro rata distributions among FSS's creditors that hold valid claims," they wrote in a filing this week in support of the trustee's emergency request. "The Texas Families, quite clearly, do not have the same goals. Rather, they seek preferential treatment and outsized recoveries by attempting to win the very race to the courthouse that they claimed to eschew on June 14."
Lawyers for the Texas plaintiffs are urging Lopez not to grant the trustee's request to block them because, they say, the judge already ruled that Free Speech Systems should fall under state jurisdiction.
"FSS is no longer in bankruptcy," the lawyers said in a court filing. "The automatic stay has been lifted. The parties are allowed to pursue available state-court remedies. And the Texas Plaintiffs are doing just that."
Court filings indicate Jones has about $9 million in personal assets, while Free Speech Systems holds about $6 million in cash with more than $1 million in inventory.
Thursday's hearing could move Infowars closer to shutting down, Jones warned on his show Tuesday.
"I know it's exhausting. It's exhausting for me, this rollercoaster battle as the establishment tries to shut down Infowars," he said, adding that he wants to continue broadcasting because it allows him to make a profit that his creditors should desire so he can pay them off.
But "they don't want money," he told his listeners, "they want me silenced."
Erik Ortiz is a senior reporter for NBC News Digital focusing on racial injustice and social inequality.