A company affiliated with conspiracy theorist Alex Jones asked a federal judge on Monday to disqualify a bid by the satirical news outlet The Onion to buy Jones’ Infowars at a bankruptcy auction, alleging fraud and collusion.
The company, First United American Companies, which is affiliated with a Jones website that sells dietary supplements, was the only other bidder at the recent auction, offering US$3.5 million. In a filing in federal bankruptcy court in Houston, a lawyer for the company asked the judge to declare it the winning bidder instead of The Onion.
The lawyer, Walter Cicack, claimed that the bankruptcy trustee overseeing the auction improperly colluded with The Onion and families of victims of the Sandy Hook Elementary School shooting in Connecticut in naming The Onion the winning bidder. Cicack also alleged the trustee violated rules for the sale set by the judge, and said the company’s cash offer was twice the amount of The Onion’s.
FILE – Right-wing conspiracy theorist Alex Jones speaks to the media after arriving at the federal courthouse for a hearing in front of a bankruptcy judge Friday, June 14, 2024, in Houston.
David J. Phillip / The Associated Press
The bankruptcy auction was held last week as part of the liquidation of Jones’ assets, including Infowars. Proceeds from the sale will go to Sandy Hook families and other creditors. Jones filed bankruptcy in 2022 after he was ordered to pay nearly $1.5 billion in defamation lawsuits filed by the families for calling the 2012 shooting that killed 20 children and six educators a hoax staged by actors to increase gun control.
Ben Collins, CEO of The Onion’s parent company, Chicago-based Global Tetrahedron, issued a statement Monday through a spokesperson.
“We’re obviously disappointed he’s lashing out by creating conspiracies, but we’re also not surprised,” he said, referring to Jones.
The bankruptcy trustee appointed to oversee the sale, Christopher Murray, declined to comment Monday. A lawyer for the Sandy Hook families, Christopher Mattei, also declined to comment.
In a response filed in court later Monday, Murray called the allegations “baseless.” He said the motion by First United American to disqualify The Onion was “a disappointed bidder’s improper attempt to influence an otherwise fair and open auction process.”
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Murray also wrote, “Having failed in its prior efforts to bully the Trustee and his advisors into accepting its inferior bid, FUAC now alleges, without evidence, collusion and bad faith in an attempt to mislead the Court and disqualify its only competition in the auction.”
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Murray filed separate court papers Monday asking the judge to approve the sale of Infowars to The Onion.
An additional layer to sort out in the sale came last week, when lawyers for X Corp., the group established by Elon Musk when he bought Twitter, also filed a notice of appearance in Jones’ bankruptcy case.
The filing, first reported by Mother Jones, is dated to Nov. 14 and does not disclose the purpose of X’s interest in the case, other than to say that they are an interested party and requested all relevant documents in the case.
Before Musk bought Twitter, Jones and Infowars had been banned from the platform for violating the user terms. However, Musk reinstated Jones once Twitter (now X) was under his control.
Collings used X to call out Jones over the weekend for his assertations that the auction had been formally overturned.
“Obviously, when the current operators of InfoWars went back to operating as a business, they used that to falsely say the auction had been overturned and allege some truly wacky stuff,” he wrote.
Monday’s filing by First United American Companies included the formal bid submitted by The Onion, revealing that it offered $1.75 million for Infowars along with certain incentives by Sandy Hook families who won their defamation lawsuit against Jones. The families agreed to forgo up to 100% of their share of the Infowars sale proceeds and give it to other Jones creditors.
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With the families’ offer, other Jones creditors would get a total of $100,000 more than they would get if First United American Companies bought Infowars, according to The Onion’s bidding document.
Murray told the bankruptcy judge during a court hearing Thursday that the families’ incentives made it a better offer than the one by the Jones-affiliated company.
“The creditors ended up significantly better off,” Murray told the judge, adding that one of his responsibilities was to maximize value for creditors.
Judge Christopher Lopez, who said he had questions about the sale process and concerns about transparency, ordered a hearing to see exactly what happened with the auction and how the trustee chose The Onion. The date of the hearing has not been set.
Jones has been criticizing the sale process on his show and social media sites, calling it “rigged” and a “fraud.”
Over the weekend, Collins posted a series of comments about the auction on X, formerly known as Twitter.
“Long and short of it: We won the bid and — you’re not going to believe it — the previous InfoWars folks aren’t taking it well,” he wrote.
Collins said last week that The Onion planned to turn the Infowars website into a parody site, taking aim at conspiracy theorists and other social media personalities while promoting gun violence prevention efforts.
Cicack also said in Monday’s court filing that the trustee improperly changed the auction process “from a live auction to a secret process.” Cicack said that after sealed bids were submitted Nov. 8, it was expected that there would be a round of live bidding on Nov. 13.
But instead, he said, Murray decided to ask the two bidders to submit another offer as their final and best proposal, which they did. Murray then chose from those final bids without holding a round of live bidding. He alleged Murray violated the auction rules.
Lopez’s 20-page order on the sale procedures, issued in September, made such a live bidding round optional. And it gave broad authority to Murray to conduct the sale, including the power to reject any bid, no matter how high, that was “contrary to the best interests” of Jones, his company and their creditors.
Cicack called the Sandy Hook families’ portion of The Onion’s bid “Monopoly” money with no value.
“It is also the product of impermissible collusion with the Onion in an effort to ‘rig’ the auction with the goal of achieving a specific result desired by the Connecticut Families,” he wrote.
— with files from Global News
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