HOUSTON (CN) — With Alex Jones and his company facing more than $1 billion in defamation damages, his bankruptcy attorney told a judge Monday he is out of money and can’t pay his bills with his $40,000 monthly salary.
Promoting far-right conspiracy theories on his Infowars talk show, Jones developed a massive social media following and earned up to $7 million per month for Infowars’ parent company Free Speech Systems LLC — of which he is the sole owner — selling his millions of acolytes diet supplements, prepper supplies and firearm accessories.
His endless claims that the 2012 mass shooting of 20 students and six staffers at Sandy Hook Elementary in Newtown, Connecticut was a hoax staged by actors working for the government to justify seizing Americans’ firearms drove up ratings for his show and increased his company’s profits, but they may ultimately drive it out of business.
Free Speech Systems’ declaration of Chapter 11 bankruptcy in July and Jones’ parallel filing earlier this month bookended damages awards totaling nearly $1.5 billion by juries in Texas and Connecticut in defamation lawsuits brought by the families of Sandy Hook victims.
The families are facing a long road to recover those awards as Jones and Free Speech Systems are hiring counsel to appeal the verdicts, and any compensation they receive must be paid out through the bankruptcy cases filed in Houston.
To help Free Speech Systems stay afloat, Jones poured $900,000 of his personal wealth into the company and agreed to take a salary cut from more than $108,000 to $40,000 per month, his bankruptcy attorney Vickie Driver with Crowe & Dunlevy of Dallas said in a hearing Monday.
She asked U.S. Bankruptcy Judge Christopher Lopez to authorize Free Speech Systems to pay Jones his full salary as he continues to put out his syndicated talk show, aired in his studio in an undisclosed locale on the outskirts of his home city of Austin, Texas.
“I didn’t want another day to go by without people understanding he’s got bills to pay,” said Driver, appearing remotely via video conference software.
She said she was sitting next to Jones, who also logged on but sat silent, looking on solemnly throughout the 90-minute hearing.
Driver warned that without Jones, Free Speech Systems would be “administratively insolvent,” unable to pay its attorneys and other fees, and “go to Chapter 7” bankruptcy wherein all its property would be liquidated with the proceeds going to creditors and then it would go out of business.
“And right now, Mr. Jones can and may be forced to take third party employment, if he cannot make what he needs to make to survive,” Driver added.
Marty Brimmage of Akin Gump told the judge that the firm had been retained earlier Monday by a newly formed creditors committee composed of parents of Sandy Hook victims who successfully sued Jones and Free Speech Systems.
Brimmage said he opposes increasing Jones’ salary, noting that Free Speech Systems’ attorney, Raymond Battaglia, had just admitted the company has $1.8 million in cash on hand but its revenues are stagnant and it still has not paid off a $500,000 debt to PQPR Holdings, an entity Jones and his parents own that supplies diet supplements to Free Speech Systems.
“We believe, your honor, at this point there should be no changes to the budget,” Brimmage argued. “I think what you just heard from Mr. Battaglia that money is not there. So in addition to us not being in agreement at this point in time, I mean money just doesn’t grow on trees.”
But Lopez said he will consider a motion to raise Jones’ salary at a Jan. 20 hearing if the parties cannot work out a deal before then. He agreed with the debtors’ counsel that the revenue Jones generates “is the lifeblood” of Free Speech Systems.
While attorneys for the Sandy Hook litigants have accused Jones of putting himself and Free Speech Systems into bankruptcy to avoid paying their defamation awards, the parties are involved in bankruptcy mediation that could lead to a settlement and shorten a process that could otherwise take years.
But Jones’ and his company’s defamation-damages tab will only grow after March 27 when a third and final trial in yet another Sandy Hook defamation lawsuit brought by the parents of Noah Pozner, the youngest victim of the shooting, is set to kick off in Travis County District Court in Austin.
Jones initially cited the First Amendment as a defense against the defamation lawsuits.
But judges in the Connecticut and Texas cases awarded the plaintiffs default judgments after Jones failed to comply with discovery orders and skipped over liability proceedings to damages trials.
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