Alex Jones Races Back To Bankruptcy Court As Sandy Hook Defamation Case Goes Disastrously Sideways


He can’t pay the plaintiffs, he owes the money to … himself!

By: Liz Dye

Rightwing trollshow host Alex Jones had a wild three days in court. When last we left our huckster, his producer Daria Karpova was explaining to the jury that it’s very stressful for her boss when people tell evil lies about him.

Mark Bankston, attorney for Neil Heslin and Scarlett Lewis, whose 6-year-old son Jesse was murdered in the 2012 Sandy Hook school shooting, immediately pointed out the irony of Karpova’s testimony in a defamation case over her boss calling the massacre “a hoax,” unleashing hordes of his demented fans to harass the plaintiffs for years on end.,

Next up was Infowars host Owen Shroyer, also a named defendant, who inveighed against Megyn Kelly for editing clips of an interview with Jones to make him look bad. Shroyer was then questioned by plaintiffs’ counsel about a short snippet of the Newtown medical examiner saying he allowed the family members to identify the victims via photograph, which Shroyer played on air before suggesting that the state of Connecticut confiscated the bodies permanently. 

Texas allows jurors to submit written questions for witnesses, because, well, who the hell knows, probably just general cussedness.

But the questions give us an indication of the jury’s thinking, even those rejected by Travis County District Court Judge Maya Guerra Gamble, such as one likening Jones claiming a First Amendment right to say destructive, untrue things to shooter Adam Lanza’s invoking a Second Amendment right to possess a firearm even after murdering 20 children and six school staff members. But the court did allow queries along the lines of “Do you think this entire trial is staged?” and “What should be the consequence of publishing false stories which hurt people?” — not exactly hopeful omens for the defendant.

But this case, and indeed all three of the Sandy Hook lawsuits, have been gonzo from the jump, with Jones flouting discovery to such an egregious extent that courts in both Texas and Connecticut imposed “death penalty” sanctions, obviating the need for plaintiffs to prove defamation and skipping directly to the damages portion.

On the eve of the original trial date for Heslin and Lewis, Jones placed three of the defendant companies in bankruptcy and proposed a $10 million “Litigation Settlement Trust” in hopes of fobbing the plaintiffs off with about $500,000 apiece, an amount which wouldn’t even cover their accrued legal bills. Jones did manage to postpone the day of reckoning for a few weeks while the US Trustee fulminated against his “novel and dangerous tactic that is abusive and undermines the integrity of the bankruptcy system,” but eventually the tort plaintiffs dismissed the shell companies, which were basically worthless anyway, and the cases returned to state court for Jones to face the music.

So it wasn’t exactly a surprise on Friday afternoon at the conclusion of testimony when Jones’s lawyer Andino Reynal announced that he had just been informed that the defendant company Free Speech System had filed for bankruptcy. Indeed Judge Gamble said that she’d expected as much, and the parties agreed that Jones would endeavor to ensure that the new bankruptcy would not halt the ongoing proceedings. But the new filing did have the intended effect of staying the other pending cases in Texas and Connecticut, both of which are scheduled to go to trial within the next six weeks.

In some respects, the new bankruptcy is similar to the old one. In the previous case, his lawyer Kyung Lee professed indignation at the Sandy Hook plaintiffs’ ingratitude when his client was finally putting some money on the table — after jerking them around for four years, although Lee failed to mention that part. And the accountants’ declaration filed Friday tut-tuts that the plaintiffs refused to be fobbed off with a pittance, avoiding the risk that the defendants’ assets will be “cannibalized in successive trials over a five-month period.”

But because this new bankruptcy involves Jones’s main company, Free Speech Systems, Jones has had to be a whole lot more candid about his books this go round. Turns out, the supplier for the various Z-Shield and Super Male Vitality supplements that make up the bulk of FSS’s income, bringing in approximately $600,000 in weekly sales, is a Nevada company called PQPR Holdings Limited LLC. For some reason, PQPR continued to supply Infowars with tens of millions of dollars of pills despite not being paid for them.

In 2020, i.e. after the Sandy Hook plaintiffs filed their suits against Jones and FSS, the company executed a 30-year, $29.6 million promissory note to PQPR. Then in 2021 it executed another note for $25.3 million. These agreements securitized the debt, conveniently putting PQPR first in the line of creditors to be paid. According to the declaration of FSS’s proposed chief restructuring officer, the tally now stands at $53.6 million in principal plus $11.8 million in interest.

Wow, that was really generous of PQPR to be so forbearing about the bills. Wonder who owns that generic-sounding LLC with a heart of gold …

That was a little joke, of course. PQPR is managed by Jones’s father David, and owned through various corporate entities by Alex Jones, his father, and his mother, Carol Jones. Jones effectively securitized a debt to himself and his parents, allowing him to shift hundreds of thousands of dollars per month out of FSS for interest payments to himself. Neat trick, huh?

Or perhaps not. The Texas plaintiffs filed suit back in April under the Texas Uniform Fraudulent Transfer Act accusing FSS and Jones of making “transfers designed to siphon off the Jones Debtors’ assets to make them judgment-proof.” Looks like there’s no issue with “cannibalizing” assets as long as the cannibal’s last name is Jones.

The Connecticut plaintiffs leapt into action, requesting emergency relief from the automatic stay “to prevent Jones from, on nearly the literal eve of trial, once again delaying the adjudication of the Connecticut Action with the clear purpose of stopping that trial and the liquidation of the claims pending there.”

This morning Jones and FSS will start their day back in front of US Bankruptcy Judge Christopher Lopez for an emergency hearing on their request to allow the Heslin/Lewis case to go forward. Safe bet that counsel for the other Sandy Hook plaintiffs will be on the line for that one, and they won’t be in a very good mood. And then, assuming Judge Lopez signs off, they can all proceed to Judge Gamble’s courtroom in Austin, where Heslin and Scarlett will testify about the real life cost of the defendants’ lies.

So now, after rolling in this filthy spectacle for 1,000 words, we all need a shower. And it’s only Monday!

Liz Dye lives in Baltimore where she writes about law and politics.

 


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