Alex Jones is amping up the fight to stop The Onion from getting control of Infowars and its parent company, filing a lawsuit late Monday against the satirical news outlet.
The Onion's bid for Free Speech Systems was named the winning bidder after last week's bankruptcy auction, with proceeds intended for Sandy Hook families who won a defamation suit against him. Jones owes the families $1.5 billion for spreading false conspiracies that the elementary school shooting in Newtown, Conn., never happened; his followers then harassed and threatened them for years.
Jones' lawsuit asks a bankruptcy judge, who needs to sign off on the sale, to block it, calling The Onion's offer a "flagrantly non-compliant Frankenstein bid" and "the black letter definition of collusive bidding." He argues the judge should disqualify that offer, and instead name the only other bidder, First United American Companies, the winner. FUAC is affiliated with Jones and his online nutritional supplements store.
FUAC bid $3.5 million in cash. The Onion offered half that amount — $1.75 million — in cash, plus a sweetener: The Connecticut families promised to forgo some of their sale proceeds to help beat the offer from FUAC. The Onion attorneys say that deal would result in the highest payout to the other creditors, including a smaller group of families who won a separate defamation suit against Jones in Texas and did not offer to forgo any proceeds.
Jones argues that offer is based on "fake dollars" and that the rules of the auction were improperly changed at the last minute to benefit The Onion and the Connecticut families and to deny FUAC a fair chance at winning.
FUAC made its own move earlier Monday to block The Onion bid, saying in court papers that it was based on " 'Monopoly' money" and a "plan to rig the process."
U.S. bankruptcy trustee Christopher R. Murray, who is overseeing the bankruptcy auction, filed his own court papers dismissing "the barrage of baseless allegations" as just "a disappointed bidder's improper attempt to influence an otherwise fair and open auction process." Murray maintains that in "his reasonable business judgment and in consultation with his professionals," having a single round of "final and best" offers would be the best way "of maximizing value to the creditors," and that the judge's order authorizing the sale gives him the authorization "to determine which Qualified Bid is the highest or otherwise best offer."
Murray is scheduled to be deposed by FUAC attorneys Wednesday morning. A hearing in the case had previously been scheduled for next Monday; it's unclear if another will be scheduled sooner.
Former federal bankruptcy Judge Bruce Markell believes the court ultimately will defer to the trustee's judgment.
"That's what trustees are being paid for," says Markell, now a Northwestern School of Law professor. "I think there's been a big hue and cry that this was unfair. But I think if you dig down into it, I don't think the trustee did anything that adversely affected the estate. If [the trustee's] numbers are right, creditors would do better under The Onion bid than the one from FUAC."
Jones is also fighting his forced removal from his Austin studio after The Onion proclaimed itself the winner. His legal team correctly points out that the sale is not yet certified and final. But in court last week, the trustee's attorney expressed "significant concern that assets would start going out the back door, because [Jones and his team] don't like who the buyer is." Jones has since been allowed back into his studio, but Markell says the trustee may be well within his authority there, too, as he is responsible for protecting the estate's assets and value.
"Jones is in this mess because he didn't cooperate with the proceedings in Connecticut and Texas and he is, in essence, a scofflaw," Markell says, referring to how Jones' failure to comply with the discovery process resulted in his being found guilty by default. "And when you have someone who has a demonstrated animosity towards the court system, I think to assume that Jones might do something [unlawful] is perfectly appropriate […] based on his track record with the court system."
For his part, Jones railed on Tuesday's show against "the scumbags that claimed they own this place." He complained he was already losing money because his supporters believe that the sale of Infowars has already been finalized, and they worry that ordering his products now would just mean giving the money to The Onion. Jones pointed his supporters instead to a new online store at a different website.
He told his listeners they are "insane" if they don't go buy his limited edition fundraiser T-shirts, posters and supplements. "I need your support now. We're fighting the deep state at point-blank range," he bellowed. "There's one variable on whether I keep fighting, and that's you. Keep me in the fight now."
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