A bankruptcy judge has blocked The Onion’s successful bid to acquire Alex Jones’ conspiracy platform, Infowars. The decision comes amid concerns over the auction process, which the judge believed failed to maximize the potential value of the sale.
Judge’s Concerns About the Auction Process
On Tuesday, Judge Christopher Lopez of the Southern District of Texas stated, “I’m going to not approve the sale to the purchaser. I think there’s a great lack of clarity here.” He expressed that, although the auction process was “well intended,” it ultimately did not achieve the best possible outcome, describing it as leaving “money on the table.”
Last month, a court-appointed trustee announced that The Onion, through its parent company Global Tetrahedron, had won the auction for Free Speech Systems, the parent company of Infowars. This sale was part of a defamation settlement stemming from Jones’ false claims that the 2012 Sandy Hook Elementary School shooting was a hoax. The Onion’s bid included $1.75 million in cash, bolstered by a “credit” arrangement from the Connecticut families affected by the shooting. These families pledged to forgo 100% of their share of the winning bid, effectively valuing The Onion’s offer at $7 million.
In contrast, the other bid of $3.5 million came from First United American Companies, affiliated with Jones and operating his profitable online supplement business.
Infowars Auction Process
Judge Lopez took issue with how the auction had been conducted. The trustee, who had significant discretion over the process, initially planned for a live auction but later switched to sealed “best and final bids.” After The Onion was named the winning bidder, Jones and First United American Companies filed a lawsuit, describing the outcome as a “Frankenstein” bid due to the credit arrangement and other concerns related to the auction.
A two-day hearing ensued, where witnesses were brought in to address the auction process and the bids. The hearing concluded late on Tuesday evening, just before 10:30 p.m. Central Time, when Lopez rendered his decision.
Although Lopez stated that he had no issues with the composition of The Onion’s bid and acknowledged that all parties acted in “good faith,” he expressed that the auction had failed to fully explore its financial potential. “The trustee should ‘scratch and claw’ for every last dollar,” Lopez remarked, emphasizing that there had been a missed opportunity for further negotiations.
Infowars Financial Woes
Jones had been ordered to pay nearly $1.5 billion to the families of the Sandy Hook victims. Despite this, court records show that Jones has been slow to make payments while continuing to spend substantial amounts of money. Items such as studio equipment, social media accounts, an armored truck, and even a Winnebago motorhome had been listed for sale to the highest bidder.
Ben Collins, CEO of The Onion, expressed disappointment over the judge’s decision. “We are deeply disappointed in the decision, but we will continue to seek a resolution that helps the Sandy Hook families receive a positive outcome for the horror they endured,” Collins stated. He also added, “We will also continue to seek a path towards purchasing InfoWars in the coming weeks. It is part of our larger mission to make a better, funnier internet, regardless of the outcome of this case.”
Christopher Mattei, an attorney representing the Connecticut families, voiced disappointment as well, but reaffirmed their determination. “These families, who have already persevered through countless delays and roadblocks, remain resilient and determined as ever to hold Alex Jones and his corrupt businesses accountable for the harm he has caused,” Mattei said. He underscored, “This decision doesn’t change the fact that, soon, Alex Jones will begin to pay his debt to these families and he will continue doing so for as long as it takes.”
