Alex Jones testifies in August 2022 at the Travis County Courthouse. He and the company he founded are back in state District Court in Austin this week in an attempt to hold off collection of defamation judgments he’s owed since late 2021.
BRIANA SANCHEZ/AMERICAN-STATESMAN, Austin American-Statesman
Attorneys for the parent company of Infowars and the conspiracy-peddling media platform’s founder Alex Jones are back in state court fighting collection efforts in the case stemming from his lies that the Sandy Hook Elementary School shooting was a government hoax.
Jones, who was found liable for defamation after refusing to produce financial documents and comply with other court orders, owes nearly $1.5 billion to the families of the victims of the 2012 mass shooting, whom he called crisis actors in a staged shooting.
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A hearing Tuesday to determine the net worth of Austin-based Infowars parent company Free Speech Systems LLC marked the latest legal wrangling in the state court case. The company’s value will be used to determine how much Jones should be ordered to pay in a bond to continue an appeal and effectively hold off efforts for his victims to begin collecting on a $50 million judgment in the Texas case.
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If he is allowed to maintain his appeal with little or no bond, Jones could further delay efforts to sell or license Infowars assets to benefit the Sandy Hook families. He is hoping to secure a low bond amount by depicting the company as financially underwater, owing more in liabilities than it it’s worth.
From the bench Tuesday, state District Court Judge Maya Guerra Gamble referred to Jones’ record of disregard for court orders and earlier failures to provide financial documentation.
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“History tells me your client is not trustworthy or credible on this ground in particular,” she told Free Speech Systems’ attorney. Jones was not in the courtroom.
Despite the high-dollar default defamation judgments in late 2021 in cases brought in Texas and Connecticut, the Sandy Hook families have received no payments. That’s due in part to Jones and his attorneys peppering federal, bankruptcy and state courts with filings in an effort to retain control of the websites and brands.
Jones has exhausted all his appeals in Connecticut and families of the victims say the current moves in Texas amount to him continuing to delay paying the money they’re due.
‘Abject disrespect for the proceedings,’ families’ attorney says
Mark Bankston, attorney for the Texas families, objected to Free Speech Systems offering evidence at all, arguing that it was untimely, that he was not given enough time to review the documents and that it violated an earlier court order preventing such evidence. He also echoed the judge’s concerns about the information’s authenticity and the credibility of Jones and Free Speech Systems on such matters.
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“There’s been abject disrespect for the proceedings and a pervasive sense, even by counsel — perhaps especially by counsel — that Jones does not have to follow the rules,” Bankston said.
Attorney Mark Bankston, who represents Texas Sandy Hook families, appears last month during a hearing in state District Court on a proposed licensing agreement for The Onion to operate Alex Jones’ Infowars media platform as satire.
Mikala Compton/Austin American-Statesman
Tuesday’s hearing was no different, he said, with the company and Jones again flouting court norms by “dumping” a 1,800-page expert’s report less than a business day before the hearing. Bankston said it’s a tactic he has seen a dozen times in the case.
He also questioned how he could be expected to respond with his own expert or to respond under the tight timeline for a decision, which the 3rd Court of Appeals said must be completed by Friday.
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Guerra Gamble seemed inclined to agree but stopped short of shutting down the hearing.
Attorney Ben Brooks, representing Free Speech Systems, said the judge had no choice but to hear the case.
“The Court of Appeals remanded to you to take evidence and make findings, and there was a specific reference to current circumstances,” he said.
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Jones’ appeal came after Guerra Gamble last year empowered a court-appointed receiver to seize and sell Free Speech Systems assets to begin paying the judgments.
Battle over sale of Infowars, intellectual property
Receiver Greg Milligan, who was in court Tuesday, attempted to license the company’s trademark, domain and intellectual property to the satirical news brandThe Onion last month to create a revenue stream for the victims. Jones appealed and the plan was blocked by the 3rd Court of Appeals, which issued a stay to prevent collections while questions about Jones’ bankruptcy case — which he filed in late 2022 in Houston after losing the defamation cases — and the bond issue exist.
Jones also appealed the bankruptcy court’s ruling separating the assets of Free Speech Systems from his personal estate, which is currently protected from sale. Earlier this month, though, U.S. District Judge Lee Rosenthal threw out that appeal, saying Jones does not own Free Speech Systems and that it was not protected by the stay on his personal bankruptcy estate.
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The families who won the Connecticut judgment asked the Supreme Court of Texas to take up the case earlier this month.
Questions raised about Jones’ documentation
Much of the controversy around the Texas case, and the appellate court’s interest in it, was due to Guerra Gamble’s decision to impose a “death penalty sanction” of default judgment on Jones over his discovery violations, which she said were made in “flagrant bad faith and callous disregard.”
It wasn’t clear what information presented in the hearing would be used by the judge to determine the amount of the bond. Several of the exhibits were found inadmissible but will be sent to the 3rd Court of Appeals after the hearing.
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Free Speech Systems’ expert Terry Lloyd, a certified public accountant, testified that Free Speech Systems had a net worth of negative $1.35 billion and current accounts of about $106,000.
Attorneys for the families questioned the source of those figures, which appeared to come only from Free Speech Systems.
“You can say trust but verify, but there’s been no verify here,” Bankston said.
He also questioned how any expert analysis could be conducted if, as plaintiffs have alleged in other court documents, money had been siphoned off from the company illegally.
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Guerra Gamble rejected some Free Speech Systems exhibits, including alleged bank statements, saying it wasn’t clear where they were from. No one with personal knowledge of the accounts was provided to validate the information.
Bankston argued the entirety of the testimony and report should be rejected for the same reason.
Attorneys said a decision is expected by the end of the week.
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