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NEW YORK (Reuters) – A U.S. bankruptcy judge on Tuesday stopped parody news outlet The Onion from buying conspiracy theorist Alex Jones’ website Infowars, ruling that a bankruptcy auction did not result in the best possible offers.
U.S. Bankruptcy Judge Christopher Lopez rejected Jones’ claims that the auction was accompanied by a “deal,” at the end of a two-day hearing in Houston.
But he said the court-appointed receiver conducting the auction made a “good faith mistake” by quickly asking for final bids for Infowars instead of encouraging more back-to-back bids between Onion and a company related to Jones’ supplement-sale business, which is was second place.
“This was supposed to be reopened, and it was supposed to be reopened to everybody,” Lopez said. “Clearly, the commissioner left the potential for a lot of money on the table.”
Lopez said neither of the two offers for Infowars was enough money given the extent of Jones’ debts, and told the trustee he was working to resolve some of the disputes between creditors before trying to sell Infowars.
The Onion was named the winning bidder for Infowars at the November auction, but Jones and First American United Companies, a Jones affiliate, argued that the sale process was tainted because the Onion was given too much credit for supporting families who won large court judgments against Jones.
Jones declared bankruptcy in 2022 and was forced to liquidate his assets to pay $1.3 billion in legal judgments to the families of the 20 students and six staff members who died in the 2012 massacre at Sandy Hook Elementary School in Newtown, Connecticut. .
Courts in Connecticut and Texas ruled that Jones defamed the families by repeating false claims that the mass shooting was staged as part of a government plot to take away guns from Americans.
The Onion said it plans to relaunch Infowars in 2025 as a parody site full of “noticeably less hateful misinformation” than before.
Jones’ attorney, Ben Brooks, told Lopez at Monday’s hearing that Onion put up only half as much money as First American United Companies’ $3.5 million offer, but inflated its offer with “smoke and mirrors” calculations.
The Sandy Hook families of Connecticut, who are Jones’ largest creditors, upped the Onion’s offer by agreeing to forego some of the payment from the sale of Infovars so other creditors could get more money.
Christopher Murray, the court trustee charged with selling Jones’ property, testified Tuesday that the auction was fair and First American United Companies only complained about the process after learning their bid was not selected.
