HOUSTON (CN) — A federal bankruptcy judge declined to immediately shut down and liquidate Free Speech Systems, the parent company of conspiracy theorist Alex Jones’ InfoWars, as bankruptcy proceedings against Jones and the company proceed.
Jones and his company filed for bankruptcy in the fall of 2022, after two defamation judgments against him. Jones had falsely claimed that the 2012 Sandy Hook Elementary School massacre in Connecticut was a hoax, and he was ordered to pay $1.5 billion to the families of the victims for those claims.
On June 2, lawyers for many of those families filed an emergency motion to shift Free Speech Systems’ case from a Chapter 11 proceeding for reorganization to a Chapter 7 proceeding for liquidation.
“At this time, FSS has no prospect of a confirmable plan of reorganization, and has failed to demonstrate any hope of beginning to satisfy the Connecticut Families’ claims,” the families said in the motion.
U.S. Bankruptcy Judge Christopher Lopez declined to address the motion in a hearing for Jones’ case on Monday, deferring it until June 14, when the next hearing for the case is set.
Beyond the financial considerations, large sections of the motion addressed Jones’ recent conduct. Over the weekend, Jones appeared on what he called “emergency broadcasts” of his InfoWars web and radio shows and spoke for several hours about the bankruptcy case, including his dispute with the chief restructuring officer appointed to oversee Free Speech Systems.
During the broadcasts, he claimed that his studio would be shut down soon, saying, “there’s really no avenue out of this.” He called on his followers to surround the building to stop the company’s dismantling. But then he also claimed that he would soon be back in control of Free Speech Systems, and stated: “At the end of the day, we’re going to beat these people.”
In their motion on Sunday, the families’ quoted InfoWars broadcasts repeatedly, noting that Jones made several “false and offensive” statements about the chief restructuring officer and threatened to blockade the Free Speech Systems’ offices.
“Jones’ statements are concerning for a number of reasons, but most notably, they undermine the ability of a trustee to carry out any liquidation of Jones’ estate that involves his divestiture from FSS, as well as creditors’ ability to exercise their state law rights to enforce their claims. Jones’ threats to undermine this court’s orders should not be condoned,” the families wrote.
After nearly two years in bankruptcy court, the parties have yet to come to an agreement. The attorneys for the families have rejected several plans from the lawyers for Jones and Free Speech Systems. A related adversary proceeding between Free Speech and PQPR Holdings Limited, the company that supplies the supplements InfoWars sells on its site, has also presented another hurdle in the process, with PQPR’s attorneys and the families’ attorneys disagreeing over elements of both cases.
Lopez has given the parties until June 14 to come up with and agree to a plan for the Free Speech Systems bankruptcy. At that point, the judge stated during a recent hearing, the case “is either going to get dismissed or confirmed” unless the parties convince him otherwise. If dismissed, the case goes back before the state courts where the verdicts were handed down.