A federal bankruptcy judge heard arguments Monday over whether to approve the sale of Alex Jones’ Infowars to satirical news channel The Onion.
U.S. Bankruptcy Judge Christopher Lopez heard opening arguments and testimony from a witness about the auction process on Monday. Global Tetrahedron LLC, the company behind The Onion, was named the winning bidder for Jones’ Free Speech Systems and Infowars at a November auction, with support from the families of the victims of the Sandy Hook Elementary School shooting in Connecticut. First United American Companies, which has business ties to Jones, was named as a backup bidder.
Jones’ company and its assets were auctioned off to help pay the $1.5 billion in damages he owes to the families of the victims of the 2012 Sandy Hook mass shooting that left 20 children and six adults dead. Jones was found guilty of defamation by judges in Texas and Connecticut after using his platform to spread misinformation that the shooting was a hoax and claiming the families were “paid crisis actors.” His subsequent bankruptcy filing led to the auction.
Here’s what happened during the nearly six-hour first day of the sales order hearing:
Open arguments
Joshua Wolfshohl, an attorney representing trustee Christopher Murray, opened arguments Monday, saying the sale is supported by all of Jones’ creditors and was made in accordance with the order winding down Free Speech Systems and Infowars for auction.
“The trustee has made a sale proposal that pays out significantly more to unsecured creditors than any alternative,” Wolfshohl said in his opening argument. “No creditors, this is important, no creditors of (Free Speech Systems) have objected to the sale.”
The final offer from the Onion and Connecticut families was for $1.75 million in cash assets, accompanied by a waiver of distributable proceeds. This waiver allows families to give up up to 100% of their rights to better serve unsecured creditors, depending on the amount of other bids. The offer also included a share of future earnings. Combined, the final bid value was estimated at at least $7 million.
Representatives of Global Tetrahedron and the Connecticut families also presented opening statements, saying they followed the trustee’s procedure, won the auction and are now experiencing significant delays and additional costs due to the ongoing motions and court hearings in the case.
Initially, a limited objection was filed by Elon Musk’s social media site X, saying Infowars’ accounts were owned by X and could not be included in the sale.
Wolfshohl and Caroline Reckler, a representative of X Corp. who appeared in court on Monday said an agreement was reached out of court whereby The Onion agreed to move the content on Infowars’ trying to get bills done.
Ben Broocks, the attorney representing Jones, and Walter Cicack, who represented backup bidder First United American Companies, asked the judge to block the sale order, claiming Global Tetrahedron’s bid was not the highest and best bid and that the auction process was full. fraud and conspiracy.
“The offer that was made and accepted was not the highest and best,” Cicack said. “It was based on a contingency, and it was based on a formula.”
According to court documents, First United American Companies’ final offer was $3.5 million for the rights to Infowars and Free Speech Systems.
First witness statement
Jeff Tanenbaum, president of ThreeSixty Asset Advisors and an auctioneer with 40 years of experience, who served as sales agent and auctioneer at the auction, testified most of Monday afternoon.
Tanenbaum spoke about the sales order process, determining the highest bidder and the decision to switch the auction process from a live auction to an online auction for the highest and best bid.
When Broocks asked him about the validity of Global Tetrahedron’s bid, Tanenbaum said it was not a lower bid that was increased to outdo a competitor’s bid. Instead, it was a higher bid that could be adjusted to just above the reserve bidder’s bid unless the full amount was needed based on the reserve bid.
“I understood (Global Tetrahedron’s offer) as a $7 million offer,” Tanebaum said in response to a cross-examination from Broocks asking about the value of Global Tetrahedron’s offer. ‘That they offered seven million dollars. … I understood when I read that they said, ‘Here’s our bid of $7 million, but if someone comes in lower than us, I want our bid to be just above that by $100,000.’”
What to expect next
The court will reconvene in Houston on Tuesday at 1:30 p.m. to hear additional testimony from witnesses, including Trustee Murray, in the sale and closing arguments. Lopez could decide on the sale order as early as Tuesday.
If approved, Infowars and Free Speech Systems will sell to The Onion. If denied, Lopez could call a new auction or award the assets to the backup bidder, First United American Companies.
If the assets are awarded, The Onion has said it wants to relaunch Infowars as a parody site with “less hateful misinformation” than before.
In the event that The Onion gets approval to buy Infowars and likely kicks him out, Jones has set up a new studio, websites and social media accounts. He has previously said he would continue using the Infowars platform if the auction winner allowed it.
Jones is currently appealing the $1.5 billion in damages he is owed, citing freedom of speech.
Last week, a Connecticut appeals court reduced the original judgment against Jones by $150 million but upheld the rest of the ruling. Jones plans to appeal to the Supreme Court. Jones is still appealing the Texas $50 million defamation judgment.
This article originally appeared on Austin American-Statesman: Sale of Alex Jones’ Infowars heads to court
