Alex Jones returns to bankruptcy court as Sandy Hook defamation case turns disastrously sideways

(Photo by Oli Scarff/Getty Images)

Right-wing trollshow host Alex Jones had a wild three days in court. The last time we left our peddler, its producer Daria Karpova explained to the jury that it was very stressful for his boss when people tell evil lies about him.

Mark Bankston, attorney for Neil Heslin and Scarlett Lewis, whose 6-year-old son Jesse was murdered in the 2012 Sandy Hook school shooting, immediately pointed out the irony of Karpova’s testimony in a defamation case about her boss calling the massacre a “hoax”, unleashing hordes of her demented fans to harass the plaintiffs for years.

Next, Infowars host Owen Shroyer, also a named defendant, who railed against Megyn Kelly for editing clips from an interview with Jones to make him look bad. Shroyer was then questioned by plaintiffs’ attorney about a short excerpt from the Newtown Medical Examiner saying he allowed family members to identify the victims via a photograph, which Shroyer released to the antenna before suggesting that the State of Connecticut had permanently confiscated the bodies.

Texas allows jurors to submit written questions to witnesses because, Well who the hell knowsprobably just general malice.

But the questions give us an indication of the thinking of the jury, even those dismissed by Travis County District Court Judge Maya Guerra Gamble, such as one comparing Jones claiming a First Amendment right to say destructive and untrue things to the shooter Adam Lanza invoking a Second Amendment right. to own a firearm even after murdering 20 children and six school staff. But the court allowed questions like, “Do you think this whole trial is staged?” and “What should be the consequence of publishing false stories that hurt people?” – not really a good omen for the accused.

But this case, and indeed the three Sandy Hook lawsuits, were gonzo from the start, with Jones flouting the discovery to such an extent that courts in Texas and Connecticut imposed “death penalty” sanctions, avoiding thus the plaintiffs having to prove defamation and move directly to the part of the damages.

On the eve of the original trial date for Heslin and Lewis, Jones placed three of the defendant companies into bankruptcy and offered a $10 million “Litigation Settlement Trust” in hopes of offloading the plaintiffs about $500,000 each. , an amount that would not even cover their accrued legal fees. Jones managed to postpone judgment day for a few weeks as the US trustee ranted about his ‘new and dangerous tactic that is abusive and undermines the integrity of the bankruptcy system’, but ultimately the tort plaintiffs dismissed the companies screens, which were basically worthless anyway, and the cases returned to state court for Jones to face the music.

So it wasn’t exactly a surprise Friday afternoon at the end of the testimony when Jones’ lawyer, Andino Reynal, announced that he had just been informed that the defendant company Free Speech System had filed for bankruptcy. Indeed, Judge Gamble said she expected it, and the parties agreed that Jones would work to ensure that the new bankruptcy did not interrupt ongoing proceedings. But the new filing has had the effect of putting other pending cases in Texas in Connecticut on hold, both of which are expected to go to trial within the next six weeks.

In some ways, the new bankruptcy resembles the old one. In the previous case, his lawyer Kyung Lee expressed outrage at the Sandy Hook plaintiffs’ ingratitude when his client finally put money on the table – after rattling them off for four years, despite Lee having omitted to mention this part. And the accountants’ statement on Friday filed tut-tuts that plaintiffs refused to be offloaded with a paltry sum, averting the risk of the defendants’ assets being “cannibalized in successive lawsuits over a period of five months.”

But because this new bankruptcy involves Jones’ main company, Free Speech Systems, Jones has had to be a lot more outspoken about his books this round. It turns out that the supplier of the various Z-Shield and Super Male Vitality supplements that make up the bulk of FSS’s revenue, generating around $600,000 in weekly sales, is a Nevada company called PQPR Holdings Limited LLC. For some reasonsPQPR continued to supply Infowars with tens of millions of dollars worth of pills despite not being paid for.

In 2020, i.e. after Sandy Hook plaintiffs filed their lawsuits against Jones and FSS, the company executed a 30-year $29.6 million promissory note to PQPR. Then in 2021, he ran another note for $25.3 million. These agreements securitized the debt, conveniently placing PQPR first among creditors to be paid. According to the statement from FSS’s proposed director of restructuring, the tally now stands at $53.6 million in principal plus $11.8 million in interest.

Wow, that was really generous of PQPR to be so lenient with the bills. I wonder who owns this generic sounding LLC with a heart of gold…

It was a little joke, of course. PQPR is managed by Jones’ father, David, and owned through various corporate entities by Alex Jones, his father, and his mother, Carol Jones. Jones effectively securitized a debt to himself and his parents, allowing him to transfer hundreds of thousands of dollars a month out of the FSS for interest payments. to himself. Nice trick, huh?

Or maybe not. The Texas plaintiffs filed suit in April under the Texas Uniform Fraudulent Transfer Act accusing FSS and Jones of making “transfers intended to siphon assets from Jones debtors to render them judgment-proof.” It seems there is no problem “cannibalizing” assets as long as the cannibal’s last name is Jones.

The Connecticut plaintiffs sprung into action, seeking emergency automatic stay assistance “to prevent Jones, almost on the literal eve of trial, from once again delaying judgment in the Connecticut action with the clear purpose to stop this lawsuit and liquidate the pending claims there.

This morning, Jones and FSS will begin their day before US Bankruptcy Judge Christopher Lopez for an emergency hearing at their request to allow the Heslin/Lewis case to proceed. It’s a safe bet the attorneys for the other Sandy Hook plaintiffs will be in line for this one, and they won’t be in very good spirits. And then, assuming Judge Lopez approves, they can all go to Judge Gamble’s courtroom in Austin, where Heslin and Scarlett will testify to the true cost of the defendants’ lies.

So now, after rolling around in this filthy show for 1,000 words, we all need a shower. And it’s only Monday!

Bankruptcy of Free Speech Systems LLC [Docket via Court Listener]


Dye Liz lives in Baltimore where she writes on law and politics.

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