Judge rejects bankruptcy plan for Alex Jones’ Infowars but allows him to liquidate his personal assets

(CNN) — A Texas bankruptcy judge has rejected a proposed liquidation of conspiracy theorist Alex Jones’ company Free Speech Systems, the parent company of Infowars, saying that a denial of the bankruptcy plan was, in his opinion, in the best interest of the creditors. But the judge approved a separate liquidation of Jones’ personal assets.

Judge Chris Lopez said the Infowars bankruptcy process had dragged on and that it needed to stop “incurring costs” and let the families of Sandy Hook victims try to claim what they are owed through state courts. The families have not received payment of the approximately $1.5 billion in damages against Jones that they have won after he lied about the 2012 school massacre.

“The right call is to dismiss this case,” Lopez said Friday.

Lopez made his ruling in a lengthy decision where he seemed emotional at times, once even noting the timing of this decision being made shortly before Father’s Day.

“I think it needed to happen,” he said towards the end of the hearing. “I wish I would’ve picked a better day.”

Unanswered questions

The rejection of the bankruptcy plan leaves many questions to sort out in the decision’s wake. Among them: What happens next for Infowars? And what legal avenues remain for the victims’ families to collect the massive sum Jones still owes them?

This judgment could be viewed as a partial victory for Jones, who fought the liquidation proposal – but so too did some families, whose attorneys said they’ll benefit more from the bankruptcy plan’s dismissal by going after Jones’ assets immediately – rather than waiting for a prolonged bankruptcy procedure to play out.

That ruling leaves Free Speech Systems to face its creditors outside of bankruptcy in state courts, noted Marie Reilly, professor of bankruptcy law at Penn State University.

In a statement, an attorney for the families said they would press on.

“Today is a good day. Alex Jones has lost ownership of Infowars, the corrupt business he has used for years to attack the Connecticut families and so many others,” said Chris Mattei, an attorney for the families. “The Court authorized us to move immediately to collect against all Infowars assets, and we intend to do exactly that.”

Lopez noted that the case is far from over. The interim trustee, and later the permanent trustee, in Jones’ personal case will ultimately decided Infowars’ fate.

“Those trustees will make decisions about where things go,” he said. “We’re not leaving things into the wind here.”

Jay Westbrook, a University of Texas bankruptcy law professor, said that Infowars could still be sold by the court-appointed trustee to pay some of the damages owed to the families, but it would likely not fetch a high price.

“Jones owns [Free Speech Systems] and thus his bankruptcy trustee could sell it, but without his active promotion it may be of little value, except for its inventory of products he has been selling,” Westbrook said.

Jones had been opposed to liquidating Infowars and in recent days ranted on his show about what could be its impending shutdown, urging his audience to buy his products to support him.

“I’m going to try to move forward and maximize the amount of money we can make at Infowars to then have a wind-down,” Jones said outside the court house after the hearing Friday.

Jones’ attorney, Vickie Driver, applauded the decision, saying the judge was fair in his review of the unique aspects of the case.

“Mr. Jones did everything he could to preserve as much value as he could in Free Speech Systems to pay the plaintiffs,” Driver said.

Westbrook said if Jones continues at Infowars, it could maximize the amount of money the victims families could draw from it.

“The problem is that Jones’ appeal to his audience, awful as it is to say it, is probably the only thing of value he has that is not exempt in Texas and it is very difficult to make him use it to benefit anyone else,” Westbrook said.

Jones’ personal bankruptcy approved

Earlier on Friday, Lopez approved the liquidation of Jones’ personal assets after the conspiracy theorist agreed to convert his personal bankruptcy into a Chapter 7 liquidation last week. The liquidation means that Jones will immediately lose control of his property except for certain exempt property, such as a $2 million house in Austin.

Jones’ decision to seek bankruptcy protection comes after he agreed to demands from the families of Sandy Hook victims.

The judge said an interim trustee will be appointed to oversee Jones’ estate, as is standard in these cases. Jones’ attorney Vickie Driver told the court $2.8 million from the sale of Jones’ ranch could be sent to the trustee.

Jones founded Infowars, an influential conspiracy empire, in the late 1990s. Over the years, Jones has used the media company to poison the public discourse with lies and conspiracy theories, and he also enriched himself, making millions of dollars in the process.

Whatever proceeds are gained from Jones’ personal bankruptcy will amount to just a fraction of what he owes families of Sandy Hook victims.

The families argued to the court that there is “no prospect” the Jones’ company could produce a proper reorganization plan under a Chapter 11 bankruptcy, which would allow the company to remain operational through its restructuring.

The judge’s rulings on Friday would not prevent Jones from spreading conspiracy theories and lies online. X CEO Elon Musk restored Jones’ social media account in December 2023 after a five-year ban from the platform. And Jones could go on any number of far-right outlets to share his outlandish views.

But the Sandy Hook families are hoping to seize Jones’ social media accounts, arguing they are a key part of his Infowars business that allow Jones to promote his brand. And Jones may not be welcome at some venues: He had been listed as a guest on the Milwaukee stop on Tucker Carlson’s live tour but was recently dropped from the lineup without explanation.

Lies and conspiracy theories

Since founding Infowars in the late 1990s, Jones has pushed several conspiracy theories, including the lie that the 2012 Newtown, Connecticut, mass school shooting was a so-called “false flag” operation staged by the government and that the grieving family members of 20 child victims were “actors.” Jones makes money on those conspiracy theories by hawking high-priced dietary supplements to his audience.

The mood Friday on Jones’ Infowars was somber, with the far-right outlet’s hosts speculating on its future. Chase Geiser, an Infowars host who had driven with Jones to the courthouse where the bankruptcy hearing was underway, made a brief appearance on the outlet, attempting to twist the judge’s decision as one that would net Jones an even larger audience.

Jones’ regularly scheduled program was replaced with previously recorded interviews, airing conversations with Tucker Carlson and Russell Brand.

This story has been updated with additional developments and context.

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CNN’s Liam Reilly contributed to this report