US judge weighs fate of the Onion’s buyout of Infowars

By Dietrich Knauth

(Reuters) -Lawyers for conspiracy theorist Alex Jones urged a U.S. bankruptcy judge to block the sale of his Infowars website to the Onion news parody site at a Monday court hearing in Houston. 

The Onion was named the winning bidder for Infowars in a November bankruptcy auction, but Jones and a company affiliated with his dietary supplements sales have argued the sale process was plagued by fraud and collusion.

Jones declared bankruptcy in 2022 and was forced to liquidate his assets to pay $1.3 billion in legal judgments to the families of 20 students and six staff members who were fatally shot in the 2012 massacre at Sandy Hook Elementary School in Newtown, Connecticut.

Courts in Connecticut and Texas have ruled Jones defamed the families by making repeated false claims the mass shooting was staged as part of a government plot to take guns away from Americans.

The Onion has said it plans to re-launch Infowars in 2025 as a parody site filled with “noticeably less hateful disinformation” than before.

The sale must be approved by U.S. Bankruptcy Judge Christopher Lopez, who is overseeing the bankruptcy, before it is final. Lopez voiced concerns about the auction’s transparency at a previous court hearing, and he said he will continue to review the sale on Tuesday.

Jones’ attorney Ben Broocks told Lopez the Onion only put up half as much cash as the $3.5 million offer from First American United Companies, the Jones-affiliated company which was the runner up in the auction, but boosted its bid with “smoke and mirrors” calculations.

The buyout was ultimately meant to harm Jones rather than bring in more cash for his creditors, according to Broocks.

Broocks and Walter Cicack, the attorney representing First American United Companies, said the Onion had unfairly received credit for lining up support from Connecticut-based Sandy Hook families that had won the largest legal judgments against Jones. 

Those families, who are Jones’ largest creditors, boosted the Onion’s bid by agreeing to forgo immediate repayment from the Infowars sale and instead take payments from the re-launched business’s future revenue.

Christopher Murray, a court appointee trustee charged with selling Jones’ assets, has said the auction was fair, and First American United Companies was trying to improperly influence the process after submitting an inferior bid that offered less value for Jones’ creditors. 

Both bidders had the same amount of information before they were asked to submit their final offers, and the process ultimately resulted in final bids that were more than quadruple the value of the initial bids, Murray’s attorney Joshua Wolfshohl told Lopez.

Elon Musk’s social media site X has made a limited objection to the sale, saying Infowars’ social media accounts are owned by X and cannot be included in a bankruptcy sale.

The Onion resolved that objection by agreeing to migrate the content on Infowars’ X accounts to new accounts rather than seeking an outright purchase of the existing accounts.