Judge says he still must approve sale of Infowars to The Onion

A federal judge said Monday he may hold an evidentiary hearing next month to determine whether to approve the sale of conspiracy theorist Alex Jones’ media company to satirical publication The Onion.

Bankruptcy Judge Christopher Lopez in Houston explained that the sale, which will take place after the Nov. 13 auction, will remain in limbo until such a hearing when interested parties can present their cases and he can decide which, if any, of Jones’ assets , may be sold. . The date was not immediately set.

He also refused to immediately rule on Jones’ request for a temporary restraining order to disqualify the Onion’s bid and stated that “whatever the status quo was before the auction, it remains the status quo,” essentially allowing Jones to continue broadcasting with its flagship platform Infowars to currently.

“Firing people the week before Thanksgiving is not what we do, but that doesn’t seem to be what happened,” Lopez said. “People keep working.”

Another bidder, First United American Companies, a limited liability company associated with Jones’ nutritional supplement business, disputed the auction results after it said it had offered twice as much as Onion.

At stake is ownership of Infowars’ intellectual property, including its website, a prized asset at auction whose proceeds are largely intended to satisfy libel 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 First United American Companies quickly disputed the results, saying in an emergency filing trying to block the sale that it offered $3.5 million in cash — compared to Onion’s $1.75 million.

The auction process approved by Lopez 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.

Lopez said Monday that the focus of the evidentiary hearing will be on Murray’s business judgment regarding how the auction was conducted. He said he could decide to approve the sale, schedule another auction or hold additional hearings.

“I want a fair and transparent process, and let’s see where this process goes,” Lopez said, adding, “Everyone will have their day in court.”

At a previous 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 invalidate 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.