Judge to hear Alex Jones’ attempt to block sale of Infowars to The Onion

A federal judge on Monday is set to review a deal to sell conspiracy theorist Alex Jones’s media company to satirical publication The Onion after a Jones supporter offered twice as much money to challenge the deal.

At stake is ownership of Jones’ flagship platform Infowars, a prized asset at auction this month whose proceeds are largely earmarked to satisfy defamation judgments against several families of victims of the 2012 Sandy Hook Elementary School shooting.

The families won lawsuits against Jones in 2022 after he repeatedly called the massacre that killed 20 children and six employees in Newtown, Connecticut, a “hoax” on his Infowars show. He filed for bankruptcy in his home state of Texas after judgments amounting to nearly $1.5 billion.

Jones’ company, Free Speech Systems, was set to go to The Onion, which had often ridiculed him in its fake news stories, after bankruptcy trustee Christopher Murray announced the winning bid.

But the only other bidder, First United American Companies, a limited liability company linked to Jones’s nutritional supplements business, quickly disputed the results, saying in an emergency filing trying to block the sale that it had offered $3.5 million in cash – up from Onion – $1.75 million.

The auction process, approved by Bankruptcy Judge Christopher Lopez in Houston, did not require Murray to automatically select the highest bidder, and the trustee could reject a bid that was “contrary to the interests” of the estate’s creditors.

At a court hearing after the auction, Murray said “creditors were in a significantly better position” under Onion’s offer. In his statement, he also explained that most of the Sandy Hook families were willing to give up their share of the proceeds from the sale and instead receive a percentage of future earnings from the updated Infowars, which would allow other creditors to receive more money.

The Onion estimates the total value of the offering at $7 million.

But Walter Kicak, a lawyer for First American United Companies, said in a statement that the arrangement represents a “monopoly” cash offer because any future earnings are uncertain.

“It wasn’t just collaboration,” he said of the Sandy Hook families’ support for the Onion, “it was outright bid rigging.”

Chris Mattei, an attorney for some of the victims’ families, said in a previous statement that Onion provided a “public service” by leading the purchase and would “significantly prevent Jones from causing more harm.”

Onion lawyers said in a statement Sunday that the company has been “harassed and threatened by Debtor and members of its audience since their winning bid was announced.” They argued that the sale should proceed, writing that the joint bid “does not constitute collusion” and disputing the idea that there was a lack of transparency because the auction used a closed bidding process.

“Sealed bids maintain competitive tension among bidders and force bidders to offer their best terms regardless of where other bids lie,” the lawyers wrote, adding: “Far from keeping the process secret once the Trustee has selected the winning bidder, The Trustee has publicly disclosed all information regarding qualified bids, including by disclosing copies of the initial and final bids submitted by each qualified bidder.”

Onion CEO Ben Collins, who previously covered misinformation and conspiracy theories for NBC News, said on social media that while “the judge has some questions about the process and the assets,” his “offer with the families is clearly the best.”

Collins also wrote that the Onion plans to relaunch Infowars as “the dumbest website on the Internet.” A source with knowledge of the sale told NBC News that the new platform will feature prominent online comedians and content creators.

In announcing the sale, The Onion issued a press release written in the voice of the satirical CEO of Global Tetrahedron, the publication’s Chicago-based parent company.

Infowars was briefly shut down after the sale was announced before resuming operations with Jones claiming the site had been “hijacked”.

Meanwhile, Jones, who has built a small media empire on promoting conspiracy theories and disinformation, said Elon Musk and President-elect Donald Trump are investigating a bankruptcy auction in his favor after X Corp. Musk filed a notice to appear in the case. . It is assumed that X Corp. is an interested party because Jones is using X to broadcast his show, and the case involves the potential transfer of Jones’ name to X upon sale.

Last week, Jones’ lawyers filed a request for a temporary restraining order to disqualify Onion’s bid and said First United American Companies should be the winning bidder. Jones called the auction process “fraudulent” but told his audience that no matter what happens to Infowars, he will not be silenced.

This article was originally published on NBCNews.com.