Millions in the hole over conspiracy theories, Alex Jones enters businesses into bankruptcy

(CN) — Owing millions in defamation damages, three companies associated with the radio personality and conspiracy theorist Alex Jones have filed for Chapter 11 bankruptcy protection in the last 24 hours.

Infowars, a company founded by Jones that produces his show, brought the first of the filings Sunday in the Southern District of Texas. Infowars Health and Prison Planet TV, two other businesses affiliated with Infowars, quickly brought their own petitions Monday.

The bankruptcy petition from Infowars says it is a small business that holds assets valued between zero and $50,000 and faces between one to 49 creditors with liabilities hovering between $1 million to $10 million. The names of creditors with some of the largest unsecured claims, again according the petition, include families who lost children or other relatives in the 2012 mass shooting at Sandy Hook Elementary School in Newtown, Connecticut.

After Jones proclaimed to fans that the massacre was a hoax, the murdered children only actors, the families sued for defamation in Connecticut and Texas and won. Infowars says it also faces $90,000 in liability to an individual who has a potential copyright infringement claim, as well as a $50,000 claim from a counter-protestor at the 2017 Unite the Right Rally who was the subject of another of Jones’ conspiracy theories.  

A defamation case in Texas against Jones brought by some of the Sandy Hook families is scheduled to begin early next week. Because the judge in that case handed down a default judgment last year, the trial is only to determine the amount of damages the families will receive.

Jones will face a similar trial in May, this time in Connecticut where Jones also lost the case via default judgment because he failed to comply with discovery orders.

Only weeks before the flurry of bankruptcy petitions meanwhile, Jones' legal opponents accused him of using shell companies to keep millions of dollars away from creditors.

Koskoff, Koskoff and Bieder attorney Chris Mattei, who is representing the Sandy Hook families, said the recent filings in Texas will do nothing to alter the reckoning that lies ahead.

"Alex Jones is just attempting to delay the inevitable: a public trial in which he will be held accountable for his profit-driven campaign of lies against the Sandy Hook families who have brought this lawsuit,” Mattei said in a statement.

The bankruptcy petition for Infowars’ affiliate Prison Planet TV said the limited liability company owned less than $50,001 in assets. Infowars Health claimed it had between $500,000 to $1 million in assets. Both said they faced liabilities between $1 million to $10 million.

In a declaration attached to the bankruptcy petitions for the three companies, Marc Schwartz, their chief restructuring officer, said the companies do not have books of account or financial statements, and the only liabilities over them are the ones arising from potential and ongoing litigation.

“I have learned that the Debtor’s have no purpose other than to hold assets which may be used by other entities,” Schwartz said. “They undertake no business activities, they do not sell, rent or lease to others anything. … They have no bank accounts and do not pay money to anyone for any reason.”

Five individuals who have sued Jones for defamation sued Jones again on April 6, accusing him of using “an alphabet soup of shell entities” owned by his parents, for instance, to engage in fraudulent transfers to keep a fortune created by hawking products like survival equipment and bumper stickers from the hands of creditors.

A lawyer for Jones reportedly said the fraudulent transfer claims were ridiculous.

Avi Moshenberg, an attorney for Marcel Fontaine whom Jones has falsely accused of being involved in the 2018 shool shooting in Parkland, Florida, is helping to bring the fraudulent transfer claims against Jones. He noted Monday that, of the handful of companies named in the suit, only one — Infowars — actually filed for bankruptcy.

“The bottom line is the Sandy Hook families and Fontaine absolutely plan on going forward and seeking recourse for their rights being violated. This is an attempt to slow down that process, but we remain undeterred,” Moshenberg said.

Attorneys for Jones did not return requests for comment.

In 2020, a bankruptcy judge declined to let attorneys representing a group of Sandy Hook families conduct discovery into Remington’s motivations for filing for bankruptcy. The Sandy Hook families had accused the gun maker of using bankruptcy proceedings to dodge their suit into its marketing practices. During the proceedings, however, the company agreed to hand over documents to the families who were pursuing their now settled suit.

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