Infowars auction dispute is back before a judge : NPR

The fate of conspiracy theorist Alex Jones’ Infowars show could be decided as soon as today, as a federal bankruptcy judge hears arguments for and against selling the show to The Onion.

Jones calls the auction of his company a “mockery” and “rigged” in favor of The Onion, the satirical news site that was named the winning bidder. The losing bidder, First United American Companies, is a firm with business ties to Jones.

The Onion and the U.S. bankruptcy trustee who oversaw the auction, Christopher Murray, call the allegations “disingenuous and selfish,” and nothing more than the “losing bidder’s last-ditch effort to invalidate a fair and value-maximizing sale process.”

At stake is whether Jones will be able to stay in his studio and continue his brand of conspiracy mongering with his existing audience and under his long-established Infowars name, or whether he will be forced out to rebuild his brand and audience elsewhere while The Onion turns Infowars into a satire of itself.

“We could be shut down today,” Jones said Monday on Infowars. If that happens, he said he’ll move to his back-up studios and website, AlexJones.Network, and will continue posting a live feed on his usual satellites and stations and on X.com. Jones is also contesting the sale of rights to his X account, emails, domain names and other intellectual property. X’s lawyers have joined the fight, arguing that the company owns all X accounts so those cannot be sold as assets belonging to Jones, Infowars or its parent company, Free Speech Systems.

The sale of FSS is the culmination of two defamation suits brought by families whose loved ones were among the 26 children and educators murdered in the 2012 Sandy Hook School shooting in Newtown, Conn. They said Jones’ continuous spewing of false conspiracy theories that the shooting never happened prompted his followers to harass and threaten them for years.

Juries in Connecticut and Texas awarded the families a total of nearly $1.5 billion in damages; a Connecticut appeals court last week upheld the bulk of the damages on appeal, but struck down $150 million from one specific claim that the court deemed legally flawed. That leaves the total Jones now owes the families at nearly $1.3 billion.

Allegations of a ‘fatally flawed’ process

The losing bidder, FUAC, bid $3.5 million in cash. The Onion offered half that amount in cash but added a sweetener: The Connecticut families would voluntarily turn over enough of their proceeds from the sale to boost the payout for other creditors enough to beat any other offer. According to the trustee, that arrangement could yield those other creditors up to twice as much as FUAC’s offer.

Jones and FUAC cried foul, accusing the trustee of colluding with The Onion and the Connecticut families to ensure they would win. FUAC says the trustee succumbed to “pressure tactics” from the Connecticut families who only wanted to buy Infowars in order to bury it and punish Jones. It also says the trustee violated his own rules by replacing a plan for live bidding with a call for “best and final” sealed offers and by accepting the sweetener, which it says amounts to a “contingency” offer and a “floating bid” that aren’t allowed under the rules.

“The sale process was fatally flawed in its execution,” FUAC argued in court papers filed in advance of the hearing. “It was behind closed doors, cloaked in secrecy” and the sweetener “provides no actual value” because the families haven’t yet collected a penny of it and Jones is still appealing the damages.

‘A desperate attempt to manufacture controversy’

In an emergency motion Sunday night, the trustee moved to disqualify Jones’ arguments because, among other things, they came in after a court deadline and because, the trustee says, they have no merit.

Jones is “trying to thwart a sale that is the best interest of the creditors,” Murray argued in the filing. The “best and final offer” is a “customary strategy” that maximizes value to creditors, and no one objected until they found out they didn’t win,” Murray noted. He dismissed the objections as “a desperate attempt to manufacture controversy.”

The Onion agreed the challenges were just an attempt to “distract and delay” the sale. The media company denied any wrongdoing or inequity in the process, and said the judge has broad discretion to do what he thinks is best for creditors.

“Despite all the noise, the court need only address a simple question that is whether the Trustee exercised his reasonable business judgement,” argued lawyers for Global Tetrahedron, The Onion’s parent company.

For their part, the Connecticut families are also asking the judge to confirm the sale. Despite FUAC’s objections to what they claim is an unprecedented deal structure, the families’ lawyers say what would be “truly unprecedented” would be for the court to “supplant the business judgement of the Trustee and deny the sale when not a single creditor opposes [it].”

Notably, Monday’s arguments coincide with the most difficult time of year for these families, just days away from Dec. 14, when their children were brutally shot and killed at the Sandy Hook school.

That tragedy and what has seemed like endless legal wrangling may soon come to a head, almost exactly 12 years later.