InfoWars touts Alex Jones' parents in defense of small biz bankruptcy
- Law firms
- InfoWars is using bankruptcy law designed for small businesses
- Right-wing website had "family-owned structure," lawyers say
(Reuters) - Lawyers for InfoWars defended the far-right wing website’s decision to seek bankruptcy protection under a provision of the law that is for small and family-owned businesses, noting that founder Alex Jones’ parents have been involved in his endeavors.
Their statements came in court papers filed Monday in response to questions U.S. Bankruptcy Judge Christopher Lopez, who is overseeing the case, raised at a hearing last week surrounding two of the three Jones-related entities, InfoW LLC and Prison Planet TV LLC, that were placed into bankruptcy in Victoria, Texas on April 17.
InfoWars filed for bankruptcy following recent court judgments that found Jones and his media businesses liable in multiple defamation lawsuits after he falsely claimed that the 2012 Sandy Hook Elementary School shooting in Newtown, Connecticut that left 20 children and six school employees dead was a hoax. Lawyers for InfoWars have said the bankruptcy is necessary to preserve the means to eventually pay damages in the cases.
The U.S. Department of Justice’s bankruptcy watchdog and families of the Sandy Hook victims have questioned the legitimacy of the bankruptcy filing, with some saying Jones and his businesses are using the legal protection afforded under Chapter 11 to avoid trials that will determine the amount of damages owed. One trial in Texas was set to start this week but was halted as a result of the bankruptcy.
Lopez specifically had asked InfoWars attorney Kyung Lee of Parkins Lee & Rubio how InfoW and Prison Planet qualify for bankruptcy protection under “subchapter V” of bankruptcy law, a section of Chapter 11 designed to aid small businesses. Lopez noted that both entities exist solely to hold intellectual property and don’t have operations.
To qualify for subchapter V protection, a debtor must be “engaged in commercial or business activities.” Subchapter V, which was enacted in 2019, is popular for family-owned businesses.
The company’s lawyers said in Monday’s filing that until very recently, the bankrupt entities were single-member owned LLCs that “operated within a family-owned structure, which include Mr. Jones’ father and mother.” The brief did not provide further details of their involvement.
The lawyers also argued holding IP assets are “critical” to Jones’ “entrepreneurial venture” and that they are “engaged in the business of holding the legal assets and the website necessary for the family business to operate.”
A status conference is scheduled for Friday before Lopez.
The case is In re InfoW LLC, U.S. Bankruptcy Court, Southern District of Texas, No. 22-60020.
For InfoW: Kyung Lee and R.J. Shannon of Parkins Lee & Rubio
For the Sandy Hook families: Ryan Chapple of Cain & Skarnulis; Randy Williams of Byman & Associates; and J. Maxwell Beatty of The Beatty Law Firm
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