Alex Jones Estate to Be Liquidated to Pay Sandy Hook Debt

Alex Jones’ personal bankruptcy was converted to a formal liquidation, meaning a trustee will decide how Jones will pay down $1.5 billion in defamation judgments.

Bloomberg
First Published14 Jun 2024, 11:31 PM IST
Alex Jones Estate to Be Liquidated to Pay Sandy Hook Debt
Alex Jones Estate to Be Liquidated to Pay Sandy Hook Debt

(Bloomberg Law) -- Alex Jones’ personal bankruptcy was converted to a formal liquidation, meaning a trustee will decide how Jones will pay down $1.5 billion in defamation judgments.

Jones and families of Sandy Hook Elementary School shooting victims who he defamed have for months been unable to agree on how he will pay them. The families won their state defamation judgments against the right-wing conspiracy theorist and his media platform, Infowars, after he repeatedly called the 2012 school shooting a hoax.

At a hearing in Houston Friday, US Bankruptcy Judge Christopher Lopez said Jones’ case doesn’t trigger any exceptions to the law that would bar it from being converted to a Chapter 7 liquidation. Lopez declined a request from Sandy Hook families to include provisions laying out how the handover of Jones’ case to a trustee will proceed.

The judge said he would issue a “very clean order’’ on the matter.

A trustee could determine the future of Infowars’ bankrupt parent, Free Speech Systems LLC.

Even if Infowars is liquidated, Jones could potentially start a successor broadcast, Kyle J. Kimpler, of Paul, Weiss, Rifkind, Wharton & Garrison LLP, said on behalf of some of the Sandy Hook families during the hearing.

Defamation to Bankruptcy

Lopez ruled last year that Jones couldn’t discharge the defamation debt through bankruptcy because Jones’ conduct was intentional and malicious.

The defamation verdicts out of Connecticut and Texas state courts pushed Free Speech into Chapter 11 in July 2022. Jones filed his own personal bankruptcy in December 2022. Lopez has overseen both bankruptcies.

Jones and his creditors in December 2023 filed competing plans in his personal bankruptcy, and in the months since have been unable to agree on a consensual path forward, even with the help of a mediator. In February, creditors voted in favor of a plan that would liquidate Jones’ assets. Jones earlier proposed a plan to keep his media company running.

Jones and Sandy Hook families in recent weeks coalesced around the idea that Jones should convert his case to a Chapter 7.

Crowe & Dunlevy PC represents Jones. Cain & Skarnulis PLLC, Koskoff Koskoff & Bieder PC, and Paul, Weiss, Rifkind, Wharton & Garrison LLP represent the Connecticut families. Willkie Farr & Gallagher LLP and Lawson & Moshenberg PLLC represent the Texas families. Akin Gump Strauss Hauer & Feld LLP represents unsecured creditors.

The case is Alexander E. Jones, Bankr. S.D. Tex., No. 22-33553, 6/14/24.

To contact the reporter on this story: Evan Ochsner in Washington at eochsner@bloombergindustry.com

To contact the editor responsible for this story: Maria Chutchian at mchutchian@bloombergindustry.com

(Adds details from hearing starting in the sixth paragraph and additional background throughout.)

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.

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First Published:14 Jun 2024, 11:31 PM IST
HomeNewsAlex Jones Estate to Be Liquidated to Pay Sandy Hook Debt

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