Alex Jones’ Media Company Reorganization Doubtful, Trustee Says

The parent company of Alex Jones’ Infowars program appears unlikely to reorganize in bankruptcy following an irreparable feud between the company’s chief officer and lead attorney, a court-appointed trustee said.

Efforts to rehabilitate Free Speech Systems LLC in Chapter 11 are about to fail, trustee Melissa Haselden told the US Bankruptcy Court for the Southern District of Texas in a one-page brief on Sunday. The trustee’s statement comes as Free Speech’s chief restructuring officer, Patrick Magill, is asking to replace lead attorney Ray Battaglia after both men said their relationship was “fundamentally broken.”

The dispute, which was recently made public in a series of heavily-redacted briefs, is raising questions about the company’s path out of bankruptcy and bid to settle about $1.5 billion in claims held by the families of Sandy Hook School shooting victims through a Chapter 11 plan. The company is scheduled to appear in court on March 25 to seek approval of its proposed reorganization plan, but it’s unclear how Battaglia’s motion to withdraw and Magill’s bid to swap legal representation may affect the course of the case.

“In the interest of transparency, the Trustee has concluded that the case is quickly approaching, if it has not already arrived, at a place in which a reorganization is not possible,” Hadelden said in Sunday’s filing.

Free Speech has outstanding litigation filed against a dietary supplement provider indirectly owned by Jones and his father, accusing the Infowars vendor of receiving millions in insider payments.

A group of Sandy Hook families said in a March 8 filing that they’re particularly concerned about an apparent accusation lodged by Magill that Battaglia “was not independent, particularly with respect to the debtor’s sole shareholder, Alex Jones.”

“The Connecticut families are bewildered by the various finger-pointing that underlies the current dispute,” the group said. “But more importantly, they are concerned about the pattern of dysfunction revealed by the pleadings and the fact that none of these events were brought to the creditors’ or the court’s attention in advance.”

If the company is going to replace its counsel, it should do so at minimal cost and object to Battaglia’s fees if he acted under a conflict of interest or refused to follow Magill’s instructions, the families said.

The parties are scheduled to appear in court Monday afternoon regarding the requests to switch counsel.

Jones and his right-wing media company filed separate bankruptcy cases in 2022 after losing state court defamation cases for calling the 2012 school shooting a hoax.

The Sandy Hook families last month voted 100% in favor of a Chapter 11 plan for Jones that would liquidate and redistribute his property and cash.

The trustee is represented by The Law Office of Liz Freeman.

The Connecticut families are represented by Paul Weiss Rifkind Wharton & Garrison LLP, Koskoff Koskoff & Bieder PC, and Cain & Skarnulis PLLC.

Free Speech’s proposed counsel is O’ConnorWechsler PLLC.

The case is In re Free Speech Systems LLC, Bankr. S.D. Tex., No. 22-60043, brief filed 3/10/24.