Judge denies latest settlement proposal in Alex Jones bankruptcy case

HOUSTON (CN) — In a surprisingly short hearing Wednesday morning, U.S. Bankruptcy Judge Christopher Lopez denied a settlement between the Connecticut families and the Texas families in Alex Jones' bankruptcy case.

In the first major action since Lopez rejected the proposed sale of Jones’ platform, Infowars, to the satirical publication The Onion, the trustee had proposed a settlement to resolve a long-running dispute between the Texas and Connecticut plaintiffs on the distribution of bankruptcy proceeds.

However, the proposal also included language that would allow the Texas families in particular to reopen their bankruptcy claims against Free Speech Systems, the parent company of Infowars, citing the judge’s September order on the sale process as its authority.

Facing more than $1.5 billion in defamation judgments over his false claims about the Sandy Hook elementary school shooting, Jones and his company filed for bankruptcy in 2022. After two years of trying and failing to reach a deal with creditors and the Sandy Hook families in two states, Lopez converted Jones’ personal bankruptcy case to Chapter 7 liquidation but dismissed the corporate bankruptcy case.

In U.S. Bankruptcy Court for the Southern District of Texas, Lopez interrupted just moments into Jones' lawyers' opening arguments to signal his displeasure with the proposal. He told the courtroom that he could not allow the trustee to use his September order, which outlined the procedures and terms of the November sale process, as justification to open up claims against Free Speech Systems.

Lopez said that his September order had served its sole purpose, and that he would be vacating it so that it could not be used for any other reason. The judge reminded the room that he had dismissed the bankruptcy case against Free Speech Systems in June 2024, meaning that no one could bring claims against the company in bankruptcy court.

Toward the end of his verbal ruling, Lopez also told trustee Christopher Murray that he would no longer allow the sale of Infowars' assets. With the September order vacated, the trustee is now only authorized to sell Infowars' equity.

“What this debtor needs and what these families need is finality in bankruptcy, so they can pursue their remedies in state court, which is where they started,” Lopez said.

Lopez did not rule on two proposed third-party settlements relating to Jones’ supplement business during the hearing.

What will happen to Infowars' assets — if they fall back into Jones’ hands or remain with the trustee — remains to be seen. Lopez has said previously that he wants the case wrapped up in 2025.

Attorneys for the parties did not immediately respond to requests for comment.