Alex Jones’ Infowars Sale Hinges on More Money and Less Secrecy

Following The Onion’s unsuccessful bid to acquire Alex Jones’ Infowars, a trustee overseeing the right-wing conspiracy theorist’s bankruptcy must contend with one clear mandate from a judge: find more money.

But that will likely be a challenging task. Judge Christopher M. Lopez offered the trustee little guidance, stating only that he was dissatisfied with the lack of transparency surrounding the initial auction.

The satirical news site has said it plans in the coming weeks to re-up its effort, which is to essentially buy and bury Infowars, use it to parody Jones, and steer his audience toward gun safety content. Its success will hinge on its ability to help Trustee Christopher Murray prove that any new offer is not only financially superior to competing bids, but that the bidding process was conducted openly.

Meanwhile, The Onion’s setback this week potentially opens the door for other interested buyers, including those who support Jones. Progressive Texas digital media startup The Barbed Wire and right-wing streaming service Tucker Carlson Network both previously expressed interest in Infowars.

“Judge Lopez left the trajectory of the case in Murray’s hands, emphasizing that the parties and their lawyers were operating in good faith, but said that the case needs to get back on track and that it must be wrapped up in 2025,” said Christopher D. Hampson, a bankruptcy professor at the University of Florida Levin College of Law.

New Sale?

Lopez’s ruling means Murray for now will continue operating the estate until he decides what to do with the Infowars assets. He’s working to liquidate Jones’ estate to pay off the more than $1.3 billion that Jones owes families of Sandy Hook Elementary School shooting victims over his false claims that the massacre was a hoax.

Lopez, at a Dec. 10 sale hearing in the US Bankruptcy Court for the Southern District of Texas, didn’t appear inclined to open up a new round of the auction because of the confusion surrounding the initial process, which was conducted via sealed bids. He left it to Murray to decide next steps, but suggested the trustee could still pursue sales, including a sale of Jones’ equity in Infowars’ parent, because there’s no disputed lien.

If the trustee pursues another auction, he’ll likely have to move away from the sealed bid structure, said Eric Snyder, head of bankruptcy at Wilk Auslander LLP.

“That’s really not favored in bankruptcy,” Snyder said.

Lopez suggested the trustee could reopen bidding using traditional “cash-is-king” rules. But if the trustee decides to allow Sandy Hook families that supported The Onion to waive their proceeds as a “sweetener,” as they did with its initial bid, the process will have to be more transparent, Hampson said.

“The judge’s biggest concerns are pending litigation over alleged secured debt in the case,” Hampson said, referring to debt held by a Jones-related entity, “and whether the defamation judgments will hold up on appeal.”

While Lopez said the trustee should have to “scratch and claw for every dollar,” he also emphasized that Murray acted in good faith, said former Nevada bankruptcy judge Bruce Markell, now a professor of bankruptcy law at Northwestern Pritzker School of Law.

Still, Lopez “shockingly held that the trustee had not proved he exercised his business judgment due to the lack of clarity in the record,” Markell said. Lopez’s position was “odd” considering the deference judges usually give bankrupt companies and their trustees to act according to their own business judgment, Markell said.

“If good faith is found, that issue should be settled,” Markell said. “If the judge wants a quick resolution, and he seemed to indicate that he does, then he shouldn’t push too deeply into the balance struck by the trustee’s good faith decisions.”

John Pottow, a professor at the University of Michigan Law School speculated that Lopez may believe both sides are willing to put more money on the table because of the intense fight over the assets.

“The trustee is going to go back and collect himself and maybe bring a motion asking for clarification of what the court wants from him,” Pottow said.

Resolution Delayed

Georgetown University law professor Adam J. Levitin said he believes the sale process will start again from scratch so The Onion and a Jones-associated backup bidder, First United American Cos., will have an opportunity to compete again.

Now that First United knows how much it needs to bid to prevail, it will have to offer enough to pay other creditors and the Sandy Hook families at least as much as they would have received with The Onion’s bid, Levitin said. Given that most of Jones’ liability is to the Sandy Hook families, that will be a tall order, he said.

“So what does this do? Mainly, it delays resolution,” Levitin said. “I’m not sure that it pushes up the sale price in a substantial way.”

Waiver

The unconventional structure of The Onion’s offer had the families that backed its bid agree to reduce their own claims to put an otherwise-lower cash bid over the top to win the auction. The Onion parent Global Tetrahedron LLC valued its final bid, which included $1.75 million in cash and the Sandy Hook families’ waiver of their claims, at more than $7 million.

While Lopez was troubled by the auction process, he didn’t have a problem with the novel treatment of the families’ claims, despite criticism from Jones and First United.

That means that if the trustee decides to hold another auction, the families can still use the power of their massive judgments to influence a sale.

“So what?” Lopez said at the hearing. “Smart lawyers can come up with creative ways and this is a unique case where there’s a billion-dollar judgment subject to appeal.”