A bankruptcy Judge scrutinising The Onion’s bid for Alex Jones ’ Infowars platform was expected to hear a second day of testimony on Tuesday (December 10, 2024) after an auctioneer defended the satirical news outlet’s winning offer in November 2024.

It is not clear how quickly U.S. Bankruptcy Judge Christopher Lopez in Houston will decide whether to approve the bid. The Onion, which wants to turn Infowars’ website and social media accounts into parodies, offered $1.75 million for Infowars’ assets in the auction.

Mr. Jones did not attend Monday’s (December 9, 2024) start of the key hearing and instead continued to broadcast from his studios in Austin.

Jeff Tanenbaum, president of ThreeSixty Asset Advisors, was grilled by lawyers for Mr. Jones and the company in a Houston courtroom on Monday (December 9, 2024) over how The Onion’s bid came to be valued at $7 million and why a live auction was not held. He defended both the value of the bid and its selection after the two sealed offers were opened.

Mr. Lopez could ultimately decide whether to void The Onion’s bid, name the Mr. Jones-affiliated company the winner or hold another auction, among other possibilities.

Mr. Jones and First United American Companies, which runs a website in Mr. Jones’ name that sells nutritional supplements and submitted the other bid, are alleging fraud and collusion in the auction that concluded on Nov. 14, 2024. The trustee and The Onion deny the allegations, accusing Jones and the company of sour grapes. First United American Companies bid $3.5 million.

The sale of Infowars is part of Mr. Jones’ personal bankruptcy case, which he filed in late 2022 after he was ordered to pay nearly $1.5 billion in defamation lawsuits in Connecticut and Texas filed by relatives of victims of the Sandy Hook Elementary School shooting in Connecticut. Mr. Jones repeatedly called the 2012 shooting that killed 20 children and six educators a hoax staged by actors and aimed at increasing gun control.

Most of the proceeds from the sale of Infowars, as well as many of Mr. Jones’ personal assets, will go to the Sandy Hook families to help satisfy judgments issued by Juries and Judges in State Courts in Connecticut and Texas. Some proceeds will go to Mr. Jones’ other creditors.

The Onion’s bid also included a pledge by many of the Sandy Hook families to forgot some or all of the auction proceeds due to them to give other creditors a total of $1,00,000 more than they would receive under other bids.

The trustee, Christopher Murray, chose The Onion, saying its proposal was better for creditors because they would receive more money. The Onion valued the bid, with the Sandy Hook families’ offer, at $7 million, because that amount was equal to a purchase price that would provide the same amount of money to the other creditors.

Mr. Tanenbaum testified that he agreed with the $7 million valuation and believed The Onion’s bid conformed to the auction rules.

A lawyer for Mr. Jones, Ben Broocks, asked Mr. Tanenbaum how it was possible that the Sandy Hook families’ offer boosted The Onion’s offer to such a high amount.

“It means the purchase price value has gone up because another purchase price would have to be higher than that value in order to provide the same net benefit to that group of creditors,” Mr. Tanenbaum said.

During his opening argument, Mr. Broocks said there was no way The Onion should have been chosen over First United American.

“How does a $1.75 million bid beat a $3.5 million bid?” he asked. “How is that $1.75 million greater? Well, it’s voodoo economics to use a phrase.”

Joshua Wolfshohl, an attorney for Mr. Murray, told the Judge on Monday (Dec. 9, 2024) that no wrongdoing occurred during the auction. He called the complaints by Mr. Jones and First United American Companies unfounded.

“The vast majority of their complaints are just fantastic, imagined conspiracy theories that have no basis in reality,” he said.

Mr. Murray, The Onion and the Sandy families deny allegations of wrongdoing. In his own Court filing, Mr. Murray called the allegations “a disappointed bidder’s improper attempt to influence an otherwise fair and open auction process.”

Up for sale at the auction were all the equipment and other assets in the Infowars studio in Austin, Texas, as well as its social media accounts, websites, video archive and product trademarks. Mr. Jones uses the studio to broadcast his far-right, conspiracy theory-filled shows on the Infowars website, his account on the social platform X and radio stations.

Mr. Jones has set up another studio, websites and social media accounts in case The Onion wins approval to buy Infowars and kicks him out. Mr. Jones has said he could continue using the Infowars platforms if the auction winner is friendly to him.

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

Conspiracy theorist Alex Jones takes the witness stand to testify at the Sandy Hook defamation damages trial at Connecticut Superior Court in Waterbury, Connecticut on September 22, 2022.
| Photo Credit: AP

Right-wing conspiracy theorist Alex Jones appears on the brink of losing the Infowars media platform that he turned into a multimillion-dollar moneymaker over the past 25 years, as a bankruptcy judge is set to rule on whether to liquidate his assets to help pay the $1.5 billion he owes for his false claims that the Sandy Hook Elementary School shooting was a hoax.

A hearing is scheduled on June 14 in the U.S. Bankruptcy Court in Houston, Texas.

‘Infowars is a sinking ship’

Mr. Jones has been telling his web viewers and radio listeners that Infowars’ parent company, Free Speech Systems, is on the verge of being shut down because of the bankruptcy. He’s also been urging them to download videos from his online archive to preserve them and pointing them to a new website of his father’s company if they want to continue buying the dietary supplements he sells on his show.

“I think it’s very accurate to say Infowars is a sinking ship,” Mr. Jones said during his show on June 12, later adding that it could be a matter of hours or days when he loses the company.

“Infowars will live on through all the great work we’ve done, all the reports we’ve filed, through you saving them and you sharing them, and of course I will come back stronger than ever,” he said. “But I’m going to stay with the ship until it fully sinks…At the last moment, I will then step onto the next ship.”

A liquidation would mean Mr. Jones’ assets would be sold off. It could also mean Mr. Jones loses ownership of Free Speech Systems, Infowars, the company’s social media accounts and all copyrights. Final details are not yet decided. Some of Jones’ supporters, including former President Donald Trump’s adviser Roger Stone, have suggested they might try to buy Infowars.

Jones’ conspiracy about the Sandy Hook school shooting

Messages seeking comment ahead of Friday’s hearing were left for bankruptcy lawyers for Mr. Jones and Free Speech Systems. He has about $9 million in personal assets, while his company has about $4 million in cash on hand, according to the most recent financial filings in court.

Mr. Jones and Texas-based Free Speech Systems filed for bankruptcy protection in 2022, when relatives of many victims of the 2012 Sandy Hook school shooting that killed 20 first graders and six educators in Newtown, Connecticut, won lawsuit judgments of more than $1.4 billion in Connecticut and $49 million in Texas.

Lawyers for the Sandy Hook families have been seeking liquidation.

“Doing so will enable the Connecticut families to enforce their $1.4 billion in judgments now and into the future while also depriving Jones of the ability to inflict mass harm as he has done for some 25 years,” Chris Mattei, a lawyer for the families in the Connecticut case, said.

The relatives said they were traumatised by Mr. Jones’ comments and his followers’ actions. They testified about being harassed and threatened by Mr. Jones’ followers, some of whom confronted the grieving families in person saying the shooting never happened and their children never existed. One parent said someone threatened to dig up his dead son’s grave.

Mr. Jones and Free Speech Systems initially filed for bankruptcy reorganisation protection that would have allowed him to run Infowars while paying the families with revenues from his show. But the two sides couldn’t agree on a final plan, and Mr. Jones recently filed for permission to switch his personal bankruptcy from a reorganisation to a liquidation.

The families in the Connecticut lawsuit, including relatives of eight dead children and adults, have asked that Free Speech Systems’ separate bankruptcy case also be converted to a liquidation. But the parents in the Texas suit — whose child, 6-year-old Jesse Lewis, died — want the company’s case dismissed.

Lawyers for the company filed documents indicating it supported liquidation, but attorneys for Jones’ personal bankruptcy case filed a motion on Wednesday saying he does not support that plan and wants the judge to dismiss the company’s case.

Future of Infowars

If Free Speech Systems’ case is dismissed, the company could return to the same position it was in after the $1.5 billion was awarded in the lawsuits. Efforts to collect the damages would go back to the state courts in Texas and Connecticut. That could give Infowars an extended lifeline as collection efforts played out.

Although he has since acknowledged that the Sandy Hook shooting happened, Mr. Jones has been saying on his recent shows that Democrats and the “deep state” are conspiring to shut down his companies and take away his free speech rights because of his views. He also has said the Sandy Hook families are being used as pawns in the conspiracy. The families’ lawyers say that is nonsense.

According to the most recent financial statements filed in the bankruptcy court, Mr. Jones personally has about $9 million in assets, including his $2.6 million Austin-area home and other real estate. He listed his living expenses at about $69,000 for April alone, including about $16,500 for expenses on his home.

Free Speech Systems, which employs 44 people, 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.

The families have a pending lawsuit in Texas accusing Mr. Jones of illegally diverting and hiding millions of dollars. Mr. Jones has denied the allegations.