July 29 (Reuters) – The parent of far-right conspiracy website InfoWars filed for U.S. bankruptcy protection on Friday as the company and its founder Alex Jones face damages from up to $150 million in a long-running falsehood lawsuit he perpetuated over Sandy Hook Elementary. school massacre
A bankruptcy filing by InfoWars’ parent, Free Speech Systems LLC, would normally result in a halt to the trial and related litigation. But Free Speech plans to ask a bankruptcy judge to allow the ongoing trial in Texas to continue and is seeking an emergency hearing Monday, according to a court filing.
However, Jones and his company could later try to use bankruptcy proceedings, started in another Texas court, to limit the size of the damages awarded by a jury.
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A bankruptcy filing by three other InfoWars entities in April proposed $10 million to settle the litigation, far less than the Sandy Hook families are seeking. The proposal included statutory releases protecting Jones and his company from lawsuits in exchange for payment.
The entities that previously filed for bankruptcy, InfoW, IW Health and Prison Planet, voluntarily ended their cases in June after the Sandy Hook families dropped them as defendants in the defamation lawsuit.
Jones was found liable last year in lawsuits filed by Sandy Hook families after he falsely claimed the 2012 school massacre was a hoax. Read more
The unusual trials came after Jones defied court orders to hand over documents in the litigation. The cases were then set for trials to determine damages, with the first underway in an Austin, Texas courtroom.
Jones claimed the shooting, in which 20 children and six school employees were shot and killed at the school in Newtown, Conn., was fabricated by gun control advocates and the mainstream media. Jones has since acknowledged that the shooting happened.
Free Speech Systems believes it is in its best interest to continue with the current damages trial because substantial resources have been spent on both sides, and the Sandy Hook plaintiffs would likely fight to keep the trial despite the bankruptcy filing, W. Marc Schwartz, the company’s restructuring adviser, said in a court filing.
Sandy Hook families had opposed the bankruptcy filing earlier in April as a “sinister” attempt by Jones to shield his assets from liability. Read more
In explaining the current bankruptcy filing, Schwartz said the Sandy Hook litigation led to InfoWars being rejected by the Internet, social media and major financial institutions. The company’s business suffered as a result, he said.
Mark Bankston, an attorney representing Sandy Hook families, said he hoped to continue presenting his case to jurors, which is expected to include testimony as soon as Monday from the parents of one of the children killed at Sandy Hook Elementary .
“Our clients are pleased that despite the bankruptcy, their trial will continue and that the jury will return a verdict,” Bankston told Reuters in a text message. “Now, InfoWars is headed straight for its long-awaited reckoning.”
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Reporting by Mike Spector, Dietrich Knauth and Jack Queen; Editing by Chris Reese and Stephen Coates
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