The families of students and adults killed in the 2012 attack at Sandy Hook Elementary have gained a key ally in their legal fight against Austin-based conspiracy theorist Alex Jones.
A Department of Justice official joined the Sandy Hook families in their fight to have the federal bankruptcy filing by three companies linked to Jones thrown out.
Jones wants to use the federal bankruptcy system to pay the Sandy Hook family members after state courts in Austin and Connecticut found that he defamed them by labeling the mass shooting, which left 20 children and six adults dead, a hoax meant to fuel a government campaign to limit gun rights.
The families say the move is an improper attempt to limit Jones financial exposure.
They say that the lawsuits are not about a passive division of assets but about trying to hold Jones accountable for the harassment he caused his followers.
Jones was accused of using the bankruptcy system to shield his assets and minimize the amount of money he will have to pay the Sandy Hook families.
Alex Jones wants immunity to testify about the Capitol attack.
The strategy employed here is a novel and dangerous tactic that is abusive and undermines the integrity of the bankruptcy system.
These bad faith cases were filed to gain a tactical advantage in the Sandy Hook lawsuits and serve no valid bankruptcy purpose.
Lawyers for the Connecticut families said that the situation allows Jones to enjoy the benefits of bankruptcy without having to make financial or business disclosures.
In a Friday afternoon status conference in his Houston courtroom, Lopez said he will consider requests to dismiss the bankruptcy files submitted by the Sandy Hook families at a May 27 hearing.
Parties should be prepared to go late. The judge promised to rule as quickly as possible.
A lot is riding on this decision. Lopez said it could be that day, or he could take some time.
Lawyers for Jones and Free Speech Systems denied that the bankruptcies were filed in bad faith.
I heard a lot of emotion. Lawyer Ray Battaglia told the judge that the bankruptcy route was taken to ensure that assets would be distributed equally.
If the desire is to find a mechanism to pay people for their legitimate claims, that is what this program proposes. I came here to pay the claims that someone tells me are appropriate.
Alex Jones was hit with $1 million for violating court orders.
Battaglia said that the alternative was to deplete assets by spending millions of dollars for trials in Austin and Connecticut.
Lawyers for the Sandy Hook families argued in a court filing that the victims will not have a vote in approving or rejecting the plan.
They objected to Jones turning to bankruptcy one week before the first trial was to begin in Austin, leading to a postponement.
The lawyers argued in a motion to dismiss the bankruptcy filings that Alex Jones was trying to avoid facing justice by resorting to his bag of tricks.
Jones wants to limit his liability to $10 million, roughly $500,000 per litigant, but acknowledge that additional consideration may be negotiated over the course of the case.
13 family members of children and adults killed at the school in Connecticut rejected Jones' offer of $120,000 per person to settle their lawsuits in Connecticut, calling it a transparent and desperate attempt to escape a public spotlight.
The Connecticut cases will be tried in August. A second Sandy Hook trial is scheduled for June, at least for now, after the Austin trial was postponed last week.
The judge in the Sandy Hook case criticized Alex Jones' lawyers.
The source of the $10 million that would be paid into a litigation settlement trust was provided in the bankruptcy documents.
$7 million from Jones and Free Speech Systems, with $2 million paid up front and $250,000 paid quarterly for five years.
$2 million in royalties from the sale of Youngevity products on the website over the course of five years.
$725,000 was added to the trust from the recent sale of Jones home.
The chief restructuring officer would be paid four months of fees.
According to court documents in Texas, the online store of InfoWars sold more than $165 million in herbal supplements, videos and other products in three years. Jones listed more than $6.2 million in assets, including three properties worth about $2.35 million and more than $500,000 in the bank. He said he had a home sale in November that netted him $3.1 million, and he also owned vehicles and an exchange trust.
Several Sandy Hook parents filed a lawsuit in early April accusing Jones of hiding assets and using shell companies to divert millions of dollars to himself.
According to the lawsuit, the illegal transfers included $18 million paid directly to Jones, on top of an annual salary that exceeds $600,000, from the same year the parents sued him for defamation.
Jones listed a $54 million debt owed to a company registered in Nevada that was owned by him, his parents and his children through an alphabet soup of shell entities, according to the lawsuit.
The lawsuit is still in its early stages.
The Austin American-Statesman originally reported that the DOJ says Alex Jones is dangerous in the Sandy Hook case.
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