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InfoWars to Dismiss Bankruptcy After Deal With DOJ Watchdog (1)

June 2, 2022, 8:08 PMUpdated: June 2, 2022, 9:08 PM

InfoWars and two affiliates tied to right-wing radio host Alex Jones struck a deal with the Justice Department to dismiss their bankruptcy cases pending in Texas.

Jones was criticized for abusing the bankruptcy system by having his companies file for bankruptcy in April to limit their liability after a defamation judgment against him and InfoWars for making false statements about the Sandy Hook Elementary School shooting. Jones and his main company with assets, Free Speech Systems LLC, didn’t file for bankruptcy.

The bankrupt companies’ chief restructuring officer “determined that it is in the best interest of the debtors’ estates and their creditors not to continue the Chapter 11 cases in light of the dismissal with prejudice of the Debtors from the lawsuits against them by the Texas and Connecticut plaintiffs,” according to the stipulationfiled Wednesday in the U.S. Bankruptcy Court for the Southern District of Texas.

The stipulation was signed by the debtors, a trustee overseeing the case, and the U.S. Trustee, which is the Justice Department’s bankruptcy watchdog.

After Jones sought bankruptcy for his companies, the Sandy Hook victim families who sued him in Connecticut and Texas for defamation responded by dismissing his three bankrupt companies from their lawsuits.

The families’ move eliminated the automatic bankruptcy stay—which had put the defamation damages litigation on pause—against Jones and Free Speech Systems.

The companies’ bankruptcy filings came shortly before the start of trials to determine how much they would have to pay in damages.

The case is In re InfoW, LLC, Bankr. S.D. Tex., No. 22-60020, stipulation filed 6/1/22.

(Updated with reporting throughout.)

To contact the reporter on this story: Daniel Gill in Washington at dgill@bloomberglaw.com

To contact the editor responsible for this story: Roger Yu at ryu@bloomberglaw.com