In a recent development, a judge hinders The Onion's acquisition of Alex Jones' Infowars.
I'm not approving the transaction with the buyer. I believe there's a significant lack of clarity here, stated Judge Christopher Lopez, a bankruptcy judge for the Southern District of Texas, during the hearing on Tuesday.
Lopez indicated that the process, although well-intentioned, failed to maximize value in any way based on the evidence presented.
Last month, a court-appointed trustee announced that the satirical news site emerged victorious in the auction to acquire Infowars’ parent company Free Speech Systems, which was sold off as part of a defamation settlement after Jones falsely labeled the Sandy Hook Elementary School tragedy a hoax.
The Onion's bid was backed by eight Sandy Hook shooting victims' families and a first responder. According to court documents, The Onion, through its parent company Global Tetrahedron, put up $1.75 million in cash and offered to waive 100% of their share of the winning bid value, amounting to $7 million.
The only other competing bid, worth $3.5 million in cash, came from First United American Companies, an organization connected to Jones and responsible for his successful online nutritional supplements business.
Lopez expressed concern over the auction process. The court-appointed trustee in charge of the case, with broad discretion to manage the auction and choose the winner based on his own judgment, had initially announced a live auction. However, the process was later altered to sealed "best and final bids." After The Onion was declared the winner, Jones and First United American Companies filed a lawsuit to halt the transaction due to concerns about the bidding process and other factors.
A two-day hearing took place, with witnesses testifying about the auction process and the bids. The testimony extended deep into the evening on Tuesday, when Lopez handed down his ruling at approximately 10:30 p.m. Central Time.
“Every last cent”
Although Lopez had no problems with The Onion's bid composition and perceived that everyone involved acted honestly, he felt that the trustee left potential revenue on the table or negotiation opportunities by employing the auction process and failing to inform other bidders about competing bids. Lopez urged the trustee to leave no stone unturned in pursuit of every last penny.
Jones was previously ordered to pay almost $1.5 billion to the Sandy Hook shooting victims' families. However, he has yet to make any payments towards the judgment, despite continuing to spend substantial sums of money monthly, as evident in court records.
Everything from the platform's studio equipment, online dietary supplement store, an armored Terradyne truck, social media accounts, and even a Winnebago motorhome was set to be sold to the highest bidder.
Jones used Infowars to propagate some of the most vile and absurd lies and conspiracy theories into the public domain. And he amassed a significant fortune in the process, capitalizing on a commerce engine built on the fear he peddled on his platform.
Ben Collins, CEO of The Onion, stated that they are "extremely disappointed" with the outcome but will continue to pursue a solution that benefits the Sandy Hook families.
"We will also be seeking a means to acquire InfoWars in the coming weeks. It is part of our larger mission to create a more amusing, entertaining internet, regardless of the outcome of this case," he added.
“Pay his debt”
In a statement, attorney Christopher Mattei, representing the Connecticut families, expressed disappointment with the decision.
"These families, who have already endured numerous delays and obstacles, remain determined and resilient as ever to hold Alex Jones and his misconduct businesses accountable for the harm he has caused," he said. "This decision does not change the fact that, soon, Alex Jones will begin to pay his debt to these families and will continue to do so until it is fully repaid."
It remains unclear what will happen to Infowars. Lopez instructed the court-appointed trustee to reassess his strategy, although he noted that reopening the auction for another round may not be a sensible approach.
No matter the ultimate outcome of the sale, Jones continues to owe the families over $1 billion, although he has filed an appeal against the ruling.
On his radio show on Tuesday, Jones celebrated the decision, declaring "we can celebrate the judge making the right decision in the most absurd, rigged auction in human history."
In light of the ongoing business transactions, it's crucial for the trustee to thoroughly explore all potential revenue sources, preventing any missed opportunities or neglected negotiations, as suggested by Judge Lopez.
The media outlet, The Onion, expressed disappointment at not immediately acquiring Infowars, yet vowed to continue seeking a solution that would benefit the Sandy Hook families.
