NEW YORK (Reuters) - A U.S. bankruptcy judge on Wednesday blocked a settlement between families who have sued Alex Jones over his false claims about the 2012 Sandy Hook Elementary School mass shooting, saying their attempt to divide the bankrupt conspiracy theorist's assets exceeded his court’s authority.
The decision complicates a proposed sale of Jones' Infowars platform, and could spur divisions between families who sued Jones and won nearly $1.3 billion in Connecticut court cases and those who won $50 million in Texas courts. The two groups of families had proposed a settlement that would guarantee the Texas families a 25% share of Jones' future payments made to the Sandy Hook families, with the Connecticut families taking 75%.
U.S. Bankruptcy Judge Christopher Lopez rejected the settlement at a hearing in Houston, saying the families were asking him to also divide up the assets of Infowars' parent company Free Speech Systems, despite the fact that the company had been dismissed from bankruptcy last year.
"I can't do that," Lopez said. “That case is closed."
Courts in Connecticut and Texas, where some of the families filed their lawsuits, have ruled Jones defamed the families by making repeated false claims that the school shooting, which killed 20 students and six staff members in Newton, Connecticut, was staged as part of a government plot to take guns away from Americans.
The legal judgments drove Jones and Free Speech Systems into bankruptcy in 2022, and Lopez has appointed a bankruptcy trustee to sell Jones’ assets.
Lopez has allowed Free Speech Systems and Infowars to be sold in Jones' ongoing personal bankruptcy. But he said he preferred a “pure sale” of the company’s equity, which is owned by Jones, rather than allowing Infowars’ assets to be broken up and sold separately.
The bankruptcy trustee, Christopher Murray, had previously sought to sell Infowars to the parody news site the Onion, through a bid that was backed by the Connecticut families. Lopez shot down that sale in January, saying that Murray "left money on the table" in order to win the Sandy Hook families’ support.
“We’re not doing that anymore, I don’t trust the process,” Lopez said. “Go sell the equity.”
The families’ attorneys had said the agreement would smooth the way for a sale of Jones’ assets, including Infowars, after their previous disagreements over how to pursue Jones’ assets. In the past, the Texas-based families focused on taking more cash from Jones, while the Connecticut-based families prioritized the shutdown of Jones' Infowars company.
Chris Mattei, an attorney for the Connecticut families, said they remain determined to "enforce every penny of judgments against Alex Jones."
(Reporting by Dietrich Knauth; Editing by Rod Nickel)
