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Alex Jones’ control of Infowars has lived on another day, although the long-term future of the site, known for peddling conspiracy theories, has been thrown into doubt after a bankruptcy judge blocked the results of a recent auction for the company’s assets.
The judge blocked the winning bid by satirical media outlet The Onion for Free Speech Systems, the Infowars parent company, finding issue with how the auction was conducted and saying it could have yielded a higher price. The company is being sold off as part of a defamation settlement after Jones falsely called the Sandy Hook Elementary School massacre a hoax.
At issue, Judge Christopher Lopez said Tuesday night, was that the auction called for sealed, best and final bids, rather than running as a live auction. A more open format could have netted a higher price, Lopez said, saying the auction itself was held in good faith and the identity of the winner was not an issue.
Jones was on air Tuesday night celebrating what he said was “the judge doing the right thing with the most ridiculous fraudulent auction known in human history.”
But Jones’ control might not last much longer. Lopez directed the court-appointed trustee to return within 30 days with a new plan.
No matter what happens with the future of Infowars, Jones still owes more than $1 billion to the families of the Sandy Hook massacre victims.
The court-appointed trustee, Christopher Murray had broad discretion to handle the auction and choose the winner based on his own judgement. After initially scheduling a two-round bidding process, with written bids followed by a live bid round for the Infowars assets, Murray changed the process so that the second round asked for sealed, best and final bids.
The Onion’s bid was unique. In addition to $1.75 million in cash, the company teamed up with some of the Sandy Hook families, who agreed to forgo their proceeds from the auction to help bolster the bid. That put the total value of their bid at $7 million. Their plans for Infowars included partnering with Everytown for Gun Safety as their exclusive advertiser.
The only other bid came from a company affiliated with Jones, called First United American Companies, which offered $3.5 million.
When The Onion was declared the winner, Jones and First United filed legal challenges.
In his ruling, Lopez said that he thought the bids were too low and that Murray could have extracted a higher price had he held an open bidding round where potential buyers could see others’ bids and adjust their own in response.
“You’ve got to scratch and claw and get everything you can for (the creditors),” he said.
Matt Ferris, a bankruptcy attorney in Texas and partner at Haynes and Boone, said in an interview that this case was “atypical” and “much more litigious.”
“It’s unusual to see the auction process challenged on the back end. It’s unusual to see a judge find trouble with that, unless there’s something really out of the order that has happened,” Ferris said.
But Ferris said that while much of the attention has been on the process, the judge is also “looking at the bottom line of the amount of both of these bids, and just thinking that the dollar amount for the recovery of creditors is just not there, and wanting the parties to go back to the negotiating table to try to bring that number up.”
Infowars can continue operating and airing its shows and publishing its content as it has been.
Lopez gave Murray 30 days to work out the next steps. It’s possible that there will be another round of bidding.
On Tuesday evening, Lopez noted that there are several options on the table, including for Murray to “abandon” the sale attempts, which would allow the families to “pursue their own remedies” in state court.
Jones has yet to begin paying the families.
In bankruptcy cases like these, there’s a balance between how much it costs to get rid of assets and the value of the assets themselves, Ferris said.
“At some point, if the value of these assets is going to be offset by the cost of running the process, then it doesn’t make sense to move forward,” Ferris said.
For its part, The Onion has said it’ll continue pursuing a purchase.
“We are deeply disappointed in today’s decision, but The Onion will continue to seek a resolution that helps the Sandy Hook families receive a positive outcome for the horror they endured,” CEO Ben Collins said in a statement. “We will also continue to seek a path towards purchasing InfoWars in the coming weeks. It is part of our larger mission to make a better, funnier internet, regardless of the outcome of this case.”
The 12th anniversary of the attack, which claimed the lives of 20 first-graders and six educators, is this Saturday.
