After a weekend in which conspiracy theorist Alex Jones warned that his media company faced an imminent shutdown by the federal government because of his bankruptcy cases, a judge on Monday allowed Jones to keep operating for the next two weeks while it is decided whether his assets should be liquidated.
Both Jones and his company, Free Speech Systems, filed for bankruptcy reorganization after he lost two lawsuits and was ordered to pay $1.5 billion to relatives of victims of the 2012 Sandy Hook Elementary School shooting. They sued Jones for calling the shooting that killed 20 first graders and six educators in Newtown, Connecticut, a hoax, claiming defamation and infliction of emotional distress.
The families have opposed Jones’ reorganization plans. On Sunday, they filed an emergency motion to convert Free Speech Systems’ bankruptcy reorganization into a liquidation, saying Jones has not made progress in showing how he will pay the lawsuit judgments.
U.S. Bankruptcy Judge Christopher Lopez in Houston said Monday that he will address the motion on June 14, when a decision on whether to liquidate Jones and his company’s assets is expected.
Jones went on his web and radio show over the weekend with “emergency broadcasts” claiming Free Speech Systems, including his Infowars broadcasts, were going to be shut down at any minute by the federal government and bankruptcy system. That did not happen. At one point, he urged his followers to form a human chain around his studio in Austin, Texas, to protect it.
Some of Jones’ comments came in profanity-laden rants, and Jones appeared to cry at points.
“There’s really no avenue out of this,” Jones said on his show Sunday. “I’m kind of in the bunker here. And don’t worry. I’ll come back. The enemy can’t help but do this attack.”
On Saturday, Jones was defiant, saying “At the end of the day, we’re going to beat these people. I’m not trying to be dramatic here, but it’s been a hard fight. These people hate our children.”
The broadcasts were in response to apparent disputes between Jones, a chief restructuring officer appointed by the bankruptcy court to oversee Jones’ company and another company that supplies the nutritional supplements Jones sells on his shows, according to lawyers in the bankruptcy cases. Jones made disparaging comments about the restructuring officer over the weekend, one of the lawyers said.
The other company that supplies the supplements, PQPR Holdings Limited, is actually mostly owned by Jones. A lawyer for PQPR said in court Monday that the company opposed allowing Free Speech Systems and Infowars to continue operating until June 14, alleging Jones was being uncooperative in the bankruptcy discussions and calling for an immediate closure of Free Speech Systems.
The PQPR attorney, Stephen Lemmon, told the judge that there was no agreement to allow Free Speech Systems to continue operating after Monday.
“We think that everybody is better off if this just gets shut down right now,” Lemmon said.
Annie Catmull, a lawyer for Free Speech Systems, asked the judge to continue allowing the company to operate.
Lopez, the judge, ruled that the company can continue to pay employee wages and other expenses until June 14, after asking the lawyers to “take the temperature down” in their arguments.
Christopher Mattei, a lawyer for the Sandy Hook families, claimed Jones was “manufacturing a crisis” about the threat of being shut down imminently, noting that the dispute was between two Jones-owned companies. PQPR also claims Free Speech Systems owes it millions of dollars in unpaid bills for the nutritional supplements, a debt called bogus by the families’ attorneys.
Jones’ lawyers have been unable to reach an agreement over the past several months with the families’ lawyers on how to resolve the bankruptcy cases. Jones’ lawyer recently said in court that the cases appear headed to liquidation or may be withdrawn.
Liquidation could mean that Jones would have to sell most of what he owns, including his company and its assets, but could keep his home and other personal belongings that are exempt from bankruptcy liquidation. Proceeds would go to his creditors, including the Sandy Hook families.
If the cases are withdrawn, it would put Jones back in the same position he was in after the $1.5 billion was awarded in the lawsuits and it would send efforts to collect the damages back to the state courts where the verdicts were reached.
The families of many, but not all, of the Sandy Hook victims sued Jones and won the two trials in Connecticut and Texas.
The relatives said they were traumatized by Jones’ comments and the actions of his followers. They testified at the trials about being harassed and threatened by Jones’ believers, some of whom confronted the grieving families in person saying the shooting never happened and their children never existed.
According to the most recent financial statements filed in the bankruptcy court, Jones personally has about $9 million in assets including his $2.6 million Austin-area home and other real estate. He also listed his living expenses at about $69,000 for April alone, including about $16,500 for expenses on his home including maintenance, housekeeping and insurance.
Infowars’ parent company, Free Speech Systems, which employs 44 people, had nearly $4 million in cash on hand at the end of April. The business made nearly $3.2 million in April, including from selling the dietary supplements, clothing and other items that Jones promotes on his show, while listing $1.9 million in expenses.
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