A federal bankruptcy judge has halted an attempt by the parents of a boy killed in the Sandy Hook Elementary School shooting to collect a portion of the $50 million they were awarded in a lawsuit against conspiracy theorist Alex Jones. The lawsuit was filed over Jones’ false claims that the 2012 massacre was a hoax.
Scarlett Lewis and Neil Heslin, whose 6-year-old son Jesse Lewis was among the victims, had recently obtained an order from a Texas state judge allowing them to begin collecting assets from Jones’ company, Free Speech Systems, the parent company of Infowars. This order followed the dismissal of the company’s bankruptcy reorganization case. However, U.S. Bankruptcy Judge Christopher Lopez in Houston ruled that the state judge’s order conflicts with federal bankruptcy law.
Judge Lopez stated that a newly appointed trustee, Christopher Murray, now has control over Jones’ ownership in Free Speech Systems. Under federal law, Murray has the authority to liquidate the company’s assets and distribute the proceeds equally among all of Jones’ creditors. This includes other relatives of Sandy Hook victims who were awarded more than $1.4 billion in a similar lawsuit in Connecticut over Jones’ false claims about the shooting.
“I don’t think the state court was actually informed of all these issues,” Lopez remarked.
Murray plans to shut down Infowars, a multimillion-dollar enterprise Jones has built over the past 25 years by selling dietary supplements, survival gear, and other merchandise. According to recent financial filings, Jones has about $9 million in personal assets, while Free Speech Systems has approximately $6 million in cash and $1.2 million worth of inventory.
Bankruptcy lawyers for Jones and his company did not immediately respond to requests for comment. On his show, Jones stated that although Infowars might cease to exist in the next two to three months, he plans to restart his broadcasts on a new platform. He also described Lewis and Heslin’s efforts in Texas state court to claim some of his assets as “illegal.”
Murray had filed a motion asking Judge Lopez to halt Lewis and Heslin’s collection efforts in state court, arguing that they would interfere with the shutdown and liquidation of Jones’ company. Free Speech Systems, based in Austin, Texas, filed for bankruptcy reorganization in July 2022 during the trial that led to the $50 million defamation award to Lewis and Heslin. Jones filed for personal bankruptcy reorganization later in 2022 after relatives of eight children and adults killed in the shooting won the Connecticut lawsuit.
On June 14, Judge Lopez converted Jones’ personal bankruptcy reorganization case into a liquidation, meaning many of his assets will be sold off to pay creditors, except for his main home and other property exempt from liquidation. On the same day, Lopez also dismissed Free Speech Systems’ bankruptcy case after Jones and the families could not agree on a final plan.
The bankruptcies automatically froze efforts by the Sandy Hook families to collect on the state lawsuit awards. Lawyers for Lewis and Heslin argued that the dismissal of Free Speech Systems’ case allowed them to return to the Texas state court in Austin and request a judge to order the company to begin turning over money and other assets to Lewis and Heslin.
“Our clients are frustrated that they will not be allowed to pursue their state court rights after all,” said Mark Bankston, a lawyer for Lewis and Heslin. “Apparently this case will remain in limbo much to Mr. Jones’ delight while the other group of plaintiffs insist they are entitled to nearly all the recovery.”
Lewis and Heslin have been at odds with the relatives in the Connecticut lawsuit over how Jones’ bankruptcies should be resolved and how his assets should be sold off. Relatives in the Connecticut suit had opposed the dismissal of Free Speech Systems’ bankruptcy, arguing it would lead to a “race” between Sandy Hook families to the state courts in Texas and Connecticut to see who could claim Jones’ assets first. The Connecticut plaintiffs supported the trustee’s motion to stop the collection efforts in Texas.
“The Connecticut families have always sought a fair and equitable distribution of Free Speech Systems’ assets for all of the families, and today’s decision sets us back on that path,” said Christopher Mattei, a lawyer for the Sandy Hook relatives who sued Jones in Connecticut.
The shooting in Newtown, Connecticut, resulted in the deaths of 20 first graders and six educators. Not all of the victims’ families sued Jones. Those who did testified about being harassed and threatened by Jones’ followers, some of whom confronted the grieving families in person, claiming the shooting never happened and their children never existed. One parent even reported that someone threatened to dig up his dead son’s grave.
Jones is appealing the judgments in the state courts. He has since stated that he now believes the shooting did happen, but maintains that free speech rights allowed him to claim otherwise.
Source: Associated Press, Reuters
