Alex Jones seeks permission to convert his personal bankruptcy into a liquidation

Conspiracy theorist Alex Jones is seeking court permission to convert his personal bankruptcy reorganisation to a liquidation, which would lead to a sell-off of a large portion of his assets to help pay some of the US$1.5 billion he owes relatives of victims of the Sandy Hook Elementary School shooting.

Jones and his media company, Free Speech Systems, both filed for bankruptcy reorganisation after the Sandy Hook families won lawsuits against him for his repeatedly calling the 2012 shooting that killed 20 first-graders and six educators in Newtown, Connecticut, a hoax on his Infowars programmes.

But Jones and the Sandy Hook families have been unable to agree on how the resolve the cases, leading to Jones filing a motion Wednesday in US Bankruptcy Court in Houston asking a judge to convert his personal case from a Chapter 11 reorganisation to a Chapter 7 liquidation.

“The debtor does not anticipate that a resolution may be reached with the other parties in interest sufficient to confirm a chapter 11 plan of reorganisation,” Jones’ filing said. “Given that there is no reasonable prospect of a successful reorganisation, remaining in chapter 11 would incur additional administrative expenses without concomitant benefit to the debtor’s estate.”

Jones’ bankruptcy lawyers did not immediately reply to Friday messages seeking comment.

Christopher Mattei, a lawyer for the families, said in a statement that “Alex Jones has hurt so many people. The Connecticut families have fought for years to hold him responsible no matter the cost and at great personal peril. Their steadfast focus on meaningful accountability, and not just money, is what has now brought him to the brink of justice in the way that matters most.”

The Sandy Hook families, meanwhile, are asking the same judge to convert Free Speech Systems’ case from a reorganisation to a liquidation.

Judge Christopher Lopez has scheduled a June 14 hearing in Houston to decide on how to resolve the cases.

Jones’ lawyers have said that the company’s case also appeared to be headed toward a liquidation, or it could be withdrawn.

Liquidation could mean that Jones would have to sell most of what he owns, including his company and its assets, but could keep his home and other personal belongings that are exempt from bankruptcy liquidation. Proceeds would go to his creditors, including the Sandy Hook families.

If Free Speech Systems’ case is withdrawn, the company would return to the same position it was in after the US$1.5 billion was awarded in the lawsuits and it would send efforts to collect the damages back to the state courts in Texas and Connecticut where the verdicts were reached.

Jones already has moved to sell some of his personal assets to pay creditors, including his Texas ranch worth around US$2.8 million.

But a liquidation of Jones’ and his company’s assets would raise only a fraction of what he owes the Sandy Hook families.

According to the most recent financial statements filed in the bankruptcy court, Jones personally has about US$9 million in assets, including his US$2.6 million Austin-area home in Texas and other real estate. He listed his living expenses at about US$69,000 for April alone, including about US$16,500 for expenses on his home, including maintenance, housekeeping and insurance.

Infowars’ parent company, Free Speech Systems, which employs 44 people, had nearly US$4 million in cash on-hand at the end of April. The business made nearly US$3.2 million in April, including from selling the dietary supplements, clothing and other items that Jones promotes on his show, while listing US$1.9 million in expenses.

Last weekend, Jones warned on his show that his company faced an imminent shutdown because of what he called a conspiracy by the government and Democrats related to his bankruptcy cases. He urged his supporters to form a human chain around his Austin studio to prevent a takeover, and said he was sleeping in the studio to guard against a shutdown — which didn’t happen.

Lopez, the judge, ruled Monday that Jones could keep operating until June 14, when decisions on potential liquidations are expected.

Jones has said on his show that even if Free Speech Systems and Infowars are sold off, he could resume his broadcasts in some other fashion.