A federal bankruptcy judge rejected a bid by satirical news outlet The Onion to purchase Alex Jones’ Free Speech Systems and Infowars platform on Tuesday, saying the auction process was unfair.
U.S. Bankruptcy Judge Christopher Lopez said that, while he believed all parties acted with good intentions, he did not think the auction process was as fair and transparent as it should have been.
“I just think this lacked transparency …,” Lopez said. “It was confusing, and it was understandably a little confusing.”
Lopez said he didn’t necessarily believe there was anything wrong with the joint bid from Global Tetrahedron — the company behind The Onion — and the Connecticut families, but he said the bid was unclear and not well understood by all parties, including the trustee.
“A lot has been said about the distributable proceeds waiver and whether that is something novel,” Lopez said. “So what? Some lawyers can come up with creative ways.”
Lopez later said in his statement that he doesn’t like second guessing the trustee but stated the bid from Global Tetrahedron was never made clear during more than 10 hours of testimony he heard over Monday and Tuesday.
Global Tetrahedron LLC, with support from the Sandy Hook Elementary School shooting victims’ families in Connecticut, was initially designated the winning bidder for Jones’ Free Speech Systems and Infowars in a November auction. First United American Companies, which has business ties with Jones, was designated the backup bidder.
The Onion and the Connecticut families’ final bid amounted to $1.75 million in cash assets, accompanied by a distributable proceeds waiver. This waiver would enable the families to forgo up to 100% of their entitlement to better serve unsecured creditors, depending on the amount of other bids. The bid also included a share of future revenue. Combined, the final bid value was estimated to be at least $7 million.
First United American Companies’ final bid was $3.5 million for rights to Infowars and Free Speech Systems, according to court filings.
Lopez said he didn’t believe Global Tetrahedron or First United’s bids were enough money for the creditors.
“I don’t see it,” Lopez said. “I don’t think it’s enough money.”
Christopher Mattei, who represents the Connecticut families in their defamation case against Jones, said in a statement Tuesday evening that the families were disappointed in the judge’s ruling.
“More than two years after earning historic verdicts in Connecticut, we are disappointed the Bankruptcy Court rejected a purchase of Infowars that the court-appointed trustee recommended as being in the best interest of the creditors,” the statement read. “These families, who have already persevered through countless delays and roadblocks, remain resilient and determined as ever to hold Alex Jones and his corrupt businesses accountable for the harm he has caused. This decision doesn’t change the fact that, soon, Alex Jones will begin to pay his debt to these families, and he will continue doing so for as long as it takes.”
Jones’ company, Free Speech Systems, and its assets — including Infowars — were auctioned off to help pay the now-$1.4 billion in damages he owes to the families of the 2012 Sandy Hook mass shooting victims, which killed 20 children and six adults. Jones was found guilty of defamation by judges in Texas and Connecticut after using his platform to spread misinformation that the shooting was a hoax and claiming the families were ‘paid crisis actors.’ His subsequent bankruptcy filing led to the auction.
Last week, a Connecticut appeals court reduced the original judgement of $1.5 billion against Jones by $150 million but upheld the rest of the award. Jones plans to continue appealing with the highest court. Jones is still appealing the $50 million Texas defamation judgement.
On Tuesday, the designated Chapter 7 trustee Christopher Murray testified that he chose Global Tetrahedron’s bid as the winning bid because it offered the best possible scenario for the unsecured creditors, meaning the people Jones owes. He said the bid was better by “a lot.”
“Inherent in this case, and always been from the first day, lots of emotion on all sides, in every way possible as you can imagine coming from the Connecticut families, the Texas families, Jones and supporters of Jones. And I get it,” Lopez said.
What now?
It was not immediately clear whether or not a new auction will occur. Lopez said at the end of his statement Tuesday that the case needed to “get back on track” and needed to be closed in 2025.
He did not remove Murray as the designated trustee on the case and left Murray to make a decision on how to proceed.
Free Speech Systems’ lease ends at the end of this month, Murray said in his testimony Tuesday.
A limited objection was initially filed by Elon Musk’s social media site X, saying Infowars’ accounts were owned by X and could not be included in the sale.
Joshua Wolfshohl, an attorney representing Murray, and Caroline Reckler, a representative for X Corp. who appeared in court Monday, said an agreement was reached outside of court where The Onion agreed to move the content on Infowars’ X accounts to new accounts, or take it down completely, rather than seek the purchase of the accounts themselves.
Reckler said Monday that X Corp.’s agreement is with the winning bidder only and therefore would need to reach another agreement with a new winner since Global Tetrahedron’s purchase was not approved by the judge.
This article originally appeared on Austin American-Statesman: Judge blocks The Onion’s bid to buy Alex Jones’ Infowars