A federal bankruptcy judge on Thursday blocked 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.
In doing so, Judge Christopher Lopez of the Southern District of Texas sided with court-appointed trustee Christopher Murray, who is overseeing the liquidation of Jones’ estate. Murray had 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.
Lopez agreed that Murray must continue his work assessing and liquidating Jones’ assets and told him, “You will not turn over a bank account.”
Murray had asked Lopez in his filing to pause for 90 days the ability of families and other creditors to collect from the sale of assets, including the liquidation of Free Speech Systems’ inventory.
He wrote that 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.”
Lopez said Thursday that he would issue an order that clarifies no money has to be turned over and that he would review the trustee’s progress next month.
“I don’t think there’s an emergency anymore,” Lopez said in making his decision.
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 occurred in 2012, when a gunman killed 20 first grade children and six adults.
The Texas litigation was initiated by the parents of one of the children killed, while the Connecticut suit was filed on behalf of families for eight of the victims.
In 2022, the plaintiffs in the two lawsuits were collectively awarded nearly $1.5 billion after they claimed 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 protection 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 he also dismissed 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 continues 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 parents 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 urged Lopez not to grant the trustee’s request to block them because, they said, he had already ruled that Free Speech Systems should fall under state jurisdiction.
But Lopez said Thursday that the order by the Texas judge who granted the Texas plaintiffs’ request “conflicts” with what he decided this month in allowing the trustee to have control.
A lawyer for the Texas plaintiffs, Mark Bankston, said in a statement that his clients are “frustrated that they will not be allowed to pursue their state court rights after all” and believes “this case will remain in limbo much to Mr. Jones’ delight.”
He said that his clients want to be partners with the other plaintiffs in collecting an equal amount of money Jones owes but that “we have been continually rebuffed,” adding that the other plaintiffs vetoed other plans to get Jones to pay while forcing him to “never speak about Sandy Hook again.”
Christopher Mattei, a lawyer for the Sandy Hook families in Connecticut, said he was pleased the judge did not allow the Texas plaintiffs to proceed.
“The Connecticut families have always sought a fair and equitable distribution of Free Speech System’s assets for all of the families, and today’s decision sets us back on that path,” Mattei said in a statement.
Lopez declined at Thursday’s hearing to wade into the division among the families.
“Last thing I want to do is start hashing out another dispute between two sets of families who have been through enough already,” he said. “Let’s just follow the rules, follow the code and follow the order.”
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.
Jones had warned on his show this week that Thursday’s hearing could move Infowars closer to shutting down.
“I know it’s exhausting. It’s exhausting for me, this roller-coaster 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.”