Alex Jones' Company To Be Broken Up And Sold For Scrap

Sadly the man himself remains unreconstructed.

The Alex Jones bankruptcy train is finally pulling into the station to unload its rancid freight. Last week US Bankruptcy Judge Christopher Lopez authorized an auction of the intellectual property belonging to Free Speech Systems, the media company Jones founded in 1999. FSS, which includes the infamous Infowars brand, will now be broken up and sold for parts.

Perhaps the remnants will be bought by Jones’ allies, in which case Infowars may continue spewing garbage as it did before, possibly with Jones at the helm. Maybe it will be bought by his enemies and become a fact checking site dedicated to promoting civic unity. Or it could wind up ripped into pieces, with some bits refashioned as memorials to Jones’ victims and others leading to online storefronts flogging supplements and dehydrated survival meals.

But whatever the outcome, it will finally end almost three years of Jones abusing the bankruptcy system to avoid the consequences of abusing grieving parents of slain children.

Speech Is Free, But Lies Will Cost Ya

In December of 2012, a gunman murdered 20 first-graders and six school staff at an elementary school in Connecticut. Within hours Jones called the surviving parents “crisis actors” participating in a hoax to gin up support for gun control. And he kept on calling them that for years, even as the families begged him to stop, because it generated millions of dollars in supplement sales for his company Free Speech Systems.

In 2018, the Sandy Hook families sued Jones in state court. Two sets of parents filed in Texas, where he lives, and another larger group filed in Connecticut, where they live. Jones and his company more or less refused to cooperate with discovery, eventually earning themselves default judgments in both states — an incredible feat of courtroom defiance which he somehow managed to accomplish twice. On the eve of the first trial in 2022, Jones placed two worthless LLCs into Chapter 11 bankruptcy, which had the effect of automatically staying the Sandy Hook cases since the LLCs had been named as codefendants.

Jones hoped to force the plaintiffs to accept a take-it-or-leave-it settlement offer of $10 million —an amount which wouldn’t even cover their legal bills after four years of chasing him around. Instead the plaintiffs dismissed the sham LLCs as defendants in the state suits and proceeded to trial. But Jones wasn’t done with his shenanigans.

Before the jury came back in Texas, FSS declared bankruptcy under Subchapter V of Chapter 11. That program allows small businesses to reorganize in an expedited fashion and is traditionally reserved for mom and pop shops with minimal debts. The timing was deliberate: Had FSS waited for the $54 million verdict, the company’s debts would have vastly exceeded the Subchapter V threshold.

Then after the $1.5 billion verdict in Connecticut, Jones declared personal bankruptcy, again under Chapter 11. The automatic stay blocked the plaintiffs from collecting on their judgments, and they have not seen a penny from him or his company to this day.

Jones never actually intended to formulate a plan in bankruptcy to reorganize his business and satisfy his creditors. Instead he screwed around the same way he’d done in the tort cases, making facially ridiculous offers and taking advantage of the stay on collections to shift assets into his father’s name. By May of 2024, Judge Lopez had had enough, giving FSS a month to come up with a reorganization plan, or he’d dismiss the case. In June, he followed through and kicked FSS to the curb.

That set off a mad scramble as the Texas plaintiffs, with their vastly smaller claim, raced to collect on their judgment by seizing FSS. A state court judge in Travis County agreed, but Judge Lopez said that FSS, which is wholly owned by Jones personally, was now a part of Alex Jones’ personal bankruptcy and not reachable by the state court. Functionally the FSS bankruptcy was collapsed into Jones’ personal bankruptcy.

Jones Drops the Pretense

Meanwhile, on the same day that the FSS case was dismissed, Jones converted his personal bankruptcy from a Chapter 11 reorganization to a Chapter 7 liquidation. Instead of continuing to pretend that he was negotiating with his creditors, Jones agreed to sell off (what remained of) his assets, including FSS.

The court appointed a lawyer named Charles Murray as Chapter 7 trustee to oversee that process, and in August, Murray moved for authorization to auction off FSS in two stages. Noting that “multiple parties have approached the Trustee to express interest in acquiring different subsets of the non-cash assets of FSS,” he proposed to sell off the IP first, including Infowars’ social media accounts, domain names, and production rights. After which he’d sell off whatever was left, including the office equipment and leftover inventory of beet tincture.

The US trustee, a lawyer named Kevin Epstein, strongly objected to this request. He argued that, as the trustee for Jones’ personal bankruptcy, Murray only had the right to sell off Jones’ ownership interest in FSS, not the company’s underlying assets themselves. But Judge Lopez sided with Murray, and at a tense hearing on Tuesday professed himself to be astonished that there could be any confusion about the extent of the trustee’s authority.

“He holds the stuff he can distribute it or he can do what he wants … just as if he owned the business,” he said irately.

“It's a really simple case,” Judge Lopez continued. “If this was just a guy named Alex Jones who owned the business called Free Speech that no one had ever heard of, this would be a really simple dispute. We wouldn't even be here today, but we are where we are and let's just go through it.”

Judge Lopez agreed to “clarify” his ruling [cough] for the benefit of the US trustee, and on Wednesday he signed the company’s death warrant.

Under the order, bidders in the first round will sign a confidentiality agreement and commit to disclose the identity of every party and/or investor. The trustee will accept bids under seal until November 8. Then the second auction for the non-IP assets will take place in December, under significantly less restrictive rules, reflecting the fact that the value of the company is almost entirely in its IP.

Significantly, there is no bar on insiders bidding, so, it’s entirely possible that Jones’ father David or other allies will come in and essentially buy the company. That certainly seems to be what Jones, who set this auction in motion by converting to Chapter 7, expects to happen.

"It's very cut and dry that the assets of Free Speech Systems, the website, the equipment, the shopping cart, all that, can be sold," he said on air last week, according to Business Insider. "And they know full well that there are a bunch of patriot buyers, and then the operation can ease on."

In fact the only part of Murray’s plan which Jones objected to was the potential sale of his own likeness and social media accounts.

“Any purchase of Jones’ persona and/or right to publicity would violate Jones’ privacy, right to publicity, and the Bankruptcy Code’s fresh start policy as it would prohibit Jones from using his own name or likeness to generate future income,” he argued. “Further, any purchase of Jones’ persona and/or right to publicity that requires Jones to commit any specific or affirmative action as part of such sale, it would violate the 13th Amendment’s prohibition on involuntary servitude.”

In court, Murray strongly implied that he will get to Jones’ personal assets, including his social media accounts, another day. But right now, he’s only concerned with winding down FSS, so the “realAlexJones” handle will have to wait. On Friday he published notice of his intent to proceed with the auction.

Let’s Not Get Too Excited

This entire episode has been filthy, and we should probably prepare for it to end in a way that’s ultimately unsatisfying, particularly if Jones’ cronies manage to buy the business and let it proceed more or less status quo ante. But if there is a silver lining, it’s that the court has already ruled that the monetary verdicts in favor of the Sandy Hook plaintiffs will survive. Thanks to 11 U.S.C. § 523, which provides that debt arising from “willful and malicious injury by the debtor ” are non-dischargeable, every dollar Jones makes for the rest of his miserable life is fair game for the Sandy Hook plaintiffs. And if he thinks they won’t try to claw back every dirty dime he transferred to his dad, well, he hasn’t learned a thing from this process.

Editors’ Note: Law and Chaos will be off Thursday for Rosh Hashanah. We’ll be back Friday on the pod, and Monday with written content.