- Infowars host Alex Jones must pay the parents of the Sandy Hook shooting $4.1 million in damages.
- During the libel trial, Jones said any damages of more than $2 million would “sink” his company.
- Legal experts told Insider that the argument is common, and that bankruptcy may give Jones less control over Infowars.
After a Texas judge ruled that conspiracy theorist Alex Jones must pay the parents of Sandy Hook shooting victim $4.1 million in libel damages, the financial health of his Infowars channel is set to be tested.
On Thursday, the judge awarded the parents far less damages than the $150 million they were seeking, although higher punitive damages could still follow. During the trial, Jones testified that any damages awarded of more than $2 million would “sink” his channel – despite financial statements made showing the channel is getting close to $800,000 a day.
Jones sought bankruptcy protection last week. His company, Free Speech Systems, which operates Infowars, filed for bankruptcy On Friday, in the middle of the trial.
Legal experts told Insider that this strategy is not uncommon, but it may not protect Jones from having to pay full libel damages and facing long-term consequences.
“Jones may not be able to overturn the judgment by filing for bankruptcy,” Nehme Rahmani, a former federal attorney and attorney, told Insider. “In general, judgments for intentional acts such as defamation are not degradable in bankruptcy.”
Filing for bankruptcy can protect you from debt collectors and delay the immediate collection of damage payments, but that largely depends on how the bankruptcy proceeds. Legal experts said that given his high profile and penchant for lying, there is likely to be a lot of scrutiny on Jones.
You should really be in bankruptcy. You can’t just say, ‘I’m broke,’ Los Angeles-based criminal attorney Joshua Ritter told Insider. “It goes through a hearing and the judge decides what you’re worth, if anything. which you have to pay.”
He added, “They’re watching you too. It’s not like you can file for bankruptcy and the next day you start making millions again and keep it to yourself.”
Jeff McFarland, a Los Angeles trial attorney who specializes in defamation cases, told Insider that Jones might try exactly that — and parents who have sued him could participate in bankruptcy proceedings, too.
“I’ve had cases where they filed for bankruptcy in the morning and I was supposed to give an opening statement because they were afraid to lose more than their company was worth, and all the proceedings stayed,” MacFarland told Insider. “The bankruptcy court is trying to find a way to keep the company afloat, not to put people out of business — but in this particular case — if the company goes bankrupt, he can start another business the next day with a different name. I mean, Alex Jones is Infowars.”
MacFarland added that Jones could face a different wrath in this way, as his company is partially owned by – or dissolved by – parents who have sued him.
“If there is a significant creditor coming forward on this case, the family or someone else may be able to take over the business in bankruptcy as the first creditor,” MacFarland said. “They can take the assets, the business, the name, what he does, and they can shut him down as they see fit – you could lose control of your business. It could be a dangerous move.”