The move by Infowars to file for bankruptcy is a legal gambit aimed at giving conspiracy peddler Alex Jones some breathing room after losing several defamation lawsuits for falsely claiming that the 2012 Sandy Hook school massacre was a hoax, experts said Monday.
Jones, who is seeking Chapter 11 protection in the United States Bankruptcy Court for the Southern District of Texas, is trying to hang on to his disinformation empire after he was found liable for damages in a trio of lawsuits last year, they said.
Who is Alex Jones?
Jones is the founder of Infowars, a far-right website that traffics in conspiracy theories and fake news. He is also the host of a syndicated radio show bearing his name, which he has used to back former President Donald Trump and white nationalist groups.
But pinning down the 48-year-old Texan on what he really believes has been hard.
During the Infowars host’s custody battle with his ex-wife, Kelly Jones, in 2017, his lawyer said Jones — who told his listeners bogus stories about the Sandy Hook school shooting; made false claims that the U.S. government was behind the Sept. 11, 2001, terrorist attacks; and accused Hillary Clinton of operating a pedophile ring out of a Washington pizza joint — is really “a performance artist.”
Jones was previously subpoenaed by the House of Representatives committee probing the January 2021 attack on the U.S. Capitol by Trump supporters.
What are the lawsuits about?
Jones was sued by the Sandy Hook parents after he falsely claimed the shooting — in which 20 children and six school employees were shot dead at the school in Newtown, Connecticut — was staged by gun-control advocates with the help of mainstream media.
Faced with legal action, he later changed his tune and acknowledged that the massacre occurred, and his lawyers have defended his speech in court as “rhetorical hyperbole” and denied it was defamation.
The courts disagreed, and last month the Sandy Hook families rejected Jones’ offer to settle their defamation lawsuit and reopened the case. Jones had offered to pay $120,000 to each of the 13 plaintiffs to make the case go away.
Each of the plaintiffs turned down the settlement offer in court documents, saying, “The so-called offer is a transparent and desperate attempt by Alex Jones to escape a public reckoning under oath with his deceitful, profit-driven campaign against the plaintiffs and the memory of their loved ones lost at Sandy Hook.”
What the Chapter 11 bankruptcy filing means
It’s not an accident that Jones did not personally file for bankruptcy.
Instead, the paperwork was filed by three Jones-affiliated companies — InfoW LLC, WwHealth LLC and Prison PlanetTV LLC — the records show.
“It appears that Alex Jones himself is not seeking bankruptcy protection because doing so would put him in a metaphorical fishbowl, where he would haveto declare all his assets and submit other personal financial information he might not want the public to know about,” Bruce Markell, a professor of bankruptcy law at Northwestern University who served as a bankruptcy judge for nine years, told NBC News.
“Instead, by having three companies affiliated with Jones file for bankruptcy protection, it shields him from some scrutiny,” Markell said.
Chapter 11 bankruptcy puts “an automatic stay on all collection activities” and allows companies to prepare turnaround plans while remaining in business, Markell said.
“For example, during Covid, a restaurant can fall behind on its bills, and it can argue that it’s a legitimate business that is struggling for reasons beyond its control and needs time to get back on its feet,” Markell said. “For Infowars, the next step is to say it is a legitimate business and ‘We’re seeking an injunction against the people suing Jones until we can get our financial act together.’”
Samir Parikh, a professor and expert on bankruptcy at Lewis & Clark Law School, agreed.
“The bankruptcy filing may be an attempt to just get a pause in the midst of what has been a series of significant setbacks,” Parikh said.
Infowars is “also trying to impose settlement talks on far-away plaintiffs through a trust fronted by two former bankruptcy judges who likely know and worked with the Texas bankruptcy judge assigned to this case,” Markell added.
“They each have years of experience on and off the bench doing exactly this job,” Markell said.
The former judges are identified in the court papers as Russell F. Nelms and Richard S. Schmidt. NBC News has reached out to both via the Southern District of Texas for clarification on how they came to be involved in the case.
While it remains to be seen whether the court will rule in favor of Infowars, the Southern District of Texas “is a popular venue for troubled businesses seeking relief,” Markell said.
What does Jones stand to lose?
Jones, who was found liable for damages in a trio of lawsuits last year, could lose control of his companies even if the bankruptcy bid is approved, Parikh said.
“Mr. Jones seems to have serious issues separating fact from fiction,” Parikh said. “If he is ostensibly the key executive and decision-maker for his media conglomerate, the bankruptcy court could appoint a trustee to take over the companies and run them while in bankruptcy.”