Judge Won’t Let Alex Jones Use Bankruptcy to Avoid Sandy Hook Damages
The New York Times (archive.ph)
By Elizabeth Williamson
2023-10-19 22:26:27GMT
The judge in Alex Jones’s bankruptcy case ruled on Thursday that he will not be allowed to use his Chapter 11 filing to evade paying more than $1 billion in verdicts to families of the Sandy Hook shooting.
The ruling by Judge Christopher Lopez in a Houston bankruptcy court means that Mr. Jones, the Infowars conspiracy broadcaster, will likely be working the rest of his life to pay his debt to the families. Last year, they were awarded historic damages in defamation lawsuits against him.
It also closes off the possibility that Mr. Jones could liquidate Infowars and force the families to accept whatever proceeds result, leaving him free to start a new business.
Earlier this year, the families asked that Judge Lopez order Mr. Jones to pay them the full damage awards, with no possibility of a trial or a forced settlement over a lesser amount — in legal terms, to make Mr. Jones’s debts to the families “non-dischargeable” through bankruptcy.
Mr. Jones spent years spreading lies that the 2012 shooting that killed 20 first graders and six educators at Sandy Hook Elementary School in Newtown, Conn., was a hoax aimed at confiscating Americans’ firearms. In 2018, the families of 10 victims sued him for defamation, and in trials in Texas and Connecticut they were awarded $1.4 billion in damages. As the cases went to trial, Infowars declared bankruptcy, and Mr. Jones declared personal bankruptcy late last year.
The families have been fighting him in bankruptcy court ever since.
Lawyers for the families had argued that Mr. Jones acted with “willful and malicious” intent in spreading lies about the families. In bankruptcy law, debts incurred through actions that are deemed “willful and malicious” are exempt from the protections for debtors offered through the courts.
Judge Lopez ruled in the families’ favor for about $1.1 billion in damages awarded to the relatives of nine victims who sued Mr. Jones in Connecticut. But he excluded $323 million in attorneys’ fees and costs awarded in the Connecticut lawsuit, ruling that the trial record did not clearly establish that those damages stemmed from “willful and malicious” actions.
Judge Lopez’s ruling was more mixed in the Sandy Hook lawsuit in Texas, won by Neil Heslin and Scarlett Lewis, whose son Jesse Lewis died in the shooting. A Texas jury had awarded the parents $49 million in damages last year. On Thursday, Judge Lopez ruled that a trial is necessary to determine whether $44 million in punitive damages, the bulk of the award, meets the “willful and malicious” standard.
Mr. Jones’s lawyers had argued that his target was “the deep state,” not the families, and that Mr. Jones was raising questions about the official narrative of a national tragedy, as he has for other events. So while he was “reckless,” his lawyer Chris Davis said, “the idea that he had a willful and malicious intent is in substantial and factual dispute,” and needed to be adjudicated separately in court.
In the case brought by the parents of Jesse Lewis, the judge agreed that it was not clear whether most of the damages awarded to Mr. Heslin and Ms. Lewis were as a result of willful and not merely reckless behavior by Mr. Jones. That is what the trial will determine.
Although Infowars has estimated revenues of some $70 million a year, Infowars was able to file for Chapter 11 under the more lenient bankruptcy rules of the Small Business Reorganization Act, known as Subchapter V.
Unlike in a traditional Chapter 11 bankruptcy, Subchapter V gives creditors like the Sandy Hook families virtually no say in a restructuring plan, nor can they file a competing plan. Before Thursday’s ruling, an impasse in talks could have resulted in liquidation of the company.
A liquidation would have put the families in line to collect a fraction of the damages, leaving Mr. Jones free to start another company just like it. Though the ruling largely closes off a forced outcome like that, settlement talks continue because Mr. Jones’s current assets are likely not sufficient to cover the damages in full.
The bankruptcy case has dragged on for nine months, putting on hold a third and final damages trial in a defamation suit filed by Veronique De La Rosa and Leonard Pozner, the parents of Noah Pozner, a 6-year-old who died in the attack. They will take part in a potential settlement with Mr. Jones regardless of whether the damages trial takes place, through an agreement approved by the bankruptcy court.
The New York Times (archive.ph)
By Elizabeth Williamson
2023-10-19 22:26:27GMT
The judge in Alex Jones’s bankruptcy case ruled on Thursday that he will not be allowed to use his Chapter 11 filing to evade paying more than $1 billion in verdicts to families of the Sandy Hook shooting.
The ruling by Judge Christopher Lopez in a Houston bankruptcy court means that Mr. Jones, the Infowars conspiracy broadcaster, will likely be working the rest of his life to pay his debt to the families. Last year, they were awarded historic damages in defamation lawsuits against him.
It also closes off the possibility that Mr. Jones could liquidate Infowars and force the families to accept whatever proceeds result, leaving him free to start a new business.
Earlier this year, the families asked that Judge Lopez order Mr. Jones to pay them the full damage awards, with no possibility of a trial or a forced settlement over a lesser amount — in legal terms, to make Mr. Jones’s debts to the families “non-dischargeable” through bankruptcy.
Mr. Jones spent years spreading lies that the 2012 shooting that killed 20 first graders and six educators at Sandy Hook Elementary School in Newtown, Conn., was a hoax aimed at confiscating Americans’ firearms. In 2018, the families of 10 victims sued him for defamation, and in trials in Texas and Connecticut they were awarded $1.4 billion in damages. As the cases went to trial, Infowars declared bankruptcy, and Mr. Jones declared personal bankruptcy late last year.
The families have been fighting him in bankruptcy court ever since.
Lawyers for the families had argued that Mr. Jones acted with “willful and malicious” intent in spreading lies about the families. In bankruptcy law, debts incurred through actions that are deemed “willful and malicious” are exempt from the protections for debtors offered through the courts.
Judge Lopez ruled in the families’ favor for about $1.1 billion in damages awarded to the relatives of nine victims who sued Mr. Jones in Connecticut. But he excluded $323 million in attorneys’ fees and costs awarded in the Connecticut lawsuit, ruling that the trial record did not clearly establish that those damages stemmed from “willful and malicious” actions.
Judge Lopez’s ruling was more mixed in the Sandy Hook lawsuit in Texas, won by Neil Heslin and Scarlett Lewis, whose son Jesse Lewis died in the shooting. A Texas jury had awarded the parents $49 million in damages last year. On Thursday, Judge Lopez ruled that a trial is necessary to determine whether $44 million in punitive damages, the bulk of the award, meets the “willful and malicious” standard.
Mr. Jones’s lawyers had argued that his target was “the deep state,” not the families, and that Mr. Jones was raising questions about the official narrative of a national tragedy, as he has for other events. So while he was “reckless,” his lawyer Chris Davis said, “the idea that he had a willful and malicious intent is in substantial and factual dispute,” and needed to be adjudicated separately in court.
In the case brought by the parents of Jesse Lewis, the judge agreed that it was not clear whether most of the damages awarded to Mr. Heslin and Ms. Lewis were as a result of willful and not merely reckless behavior by Mr. Jones. That is what the trial will determine.
Although Infowars has estimated revenues of some $70 million a year, Infowars was able to file for Chapter 11 under the more lenient bankruptcy rules of the Small Business Reorganization Act, known as Subchapter V.
Unlike in a traditional Chapter 11 bankruptcy, Subchapter V gives creditors like the Sandy Hook families virtually no say in a restructuring plan, nor can they file a competing plan. Before Thursday’s ruling, an impasse in talks could have resulted in liquidation of the company.
A liquidation would have put the families in line to collect a fraction of the damages, leaving Mr. Jones free to start another company just like it. Though the ruling largely closes off a forced outcome like that, settlement talks continue because Mr. Jones’s current assets are likely not sufficient to cover the damages in full.
The bankruptcy case has dragged on for nine months, putting on hold a third and final damages trial in a defamation suit filed by Veronique De La Rosa and Leonard Pozner, the parents of Noah Pozner, a 6-year-old who died in the attack. They will take part in a potential settlement with Mr. Jones regardless of whether the damages trial takes place, through an agreement approved by the bankruptcy court.
