Bankruptcy judge rejects The Onion's bid for Infowars

The owners of The Onion say they are "deeply disappointed" in a judge's decision to reject their bid to buy Alex Jones' Infowars company. Late Tuesday, a federal bankruptcy judge said last month's auction of Jones' business, and The Onion's bid, which had been selected as the winner, were flawed.

After two days of testimony in Houston, Judge Christopher Lopez took issue with what he called the lack of transparency in the process, the uneven playing field and the failure to maximize value for the people to whom Jones owes money.

The decision is a significant — and rare — win for Jones, who has been embroiled in a long legal battle with relatives of the 26 children and educators killed at the Sandy Hook Elementary School in Newtown, Conn., who sued Jones for defamation in 2018.

The families said Jones' repeated lies that the 2012 shooting never happened prompted his followers to mercilessly stalk and threaten them for years. After Jones refused to cooperate at trial, judges in Connecticut and Texas found him liable by default, and juries then awarded the families more than a billion dollars in damages, which Jones is still appealing. He then declared bankruptcy, and his media company, Free Speech Systems, was ordered to be sold off to help pay at least a fraction of what he owes the families.

The Connecticut families immediately expressed disappointment through a statement from their attorney, Chris Mattei. The decision is all the more poignant to the families, as it comes just days before the anniversary of the shooting on Dec. 14.

"These families, who have already persevered through countless delays and roadblocks, remain resilient and determined as ever to hold Alex Jones and his corrupt businesses accountable for the harm he has caused," Mattei said.

Ben Collins, CEO of The Onion's parent company, Global Tetrahedron, said he "will continue to seek a resolution that helps the Sandy Hook families receive a positive outcome for the horror they endured," but lamented "that everyone was sent back to the drawing board with no winner, and no clear path forward for any bidder."

In an "emergency" broadcast Tuesday night, Jones crowed about his "victory" and derided the auction as yet another case of corruption and collusion.

"All right, ladies and gentlemen, we can celebrate the judge doing the right thing with the most ridiculous fraudulent auction known in human history," he said, calling The Onion offer "freaking cuckoo bird."

Judge says the auction 'left a lot of money on the table'

Lopez rejected allegations from Jones' lawyers of a "rigged process" and "collusion" between the Trustee and The Onion. The judge said he believes everyone acted in good faith, but that the trustee overseeing the sale should have "scratched and clawed" to get a higher offer for the families.

"I don't like second-guessing trustees," the judge said, but that is exactly what he did.

"It's clear that [U.S. bankruptcy trustee Christopher Murray] left a lot of money on the table," Lopez said, adding that he thought the process was "doomed" the moment Murray decided to cancel a live auction and call for sealed "best and final" offers instead.

The losing bidder, a business connected to Jones called First United American Companies, offered $3.5 million for Infowars. The Onion, in partnership with the Connecticut families, offered $1.75 million in cash, plus a novel sweetener they said raised the bid's value to at least $7 million. The families agreed to forgo some of the money they're entitled to, in order to raise the amount that other creditors, including the Texas families, could collect. But the judge said both offers were too small.

Lopez said he wants the trustee to sell Infowars in a way that will bring in more money — but how to do that, he said, is up to the trustee. And the judge wants to hear the plan in 30 days.

The decision means Jones will be able to continue his show under the Infowars name, to his Inforwars audience and from his Infowars studio — at least for now. Had The Onion's bid been approved, Jones would have been kicked out of his studio and would have had to start rebuilding his audience and his brand from a back-up studio. The Onion's intent was to "end Infowars' relentless barrage of disinformation" and replace it with their brand of satire to skewer Jones' brand of conspiracy mongering. The site would have also promoted gun violence prevention through a collaboration with Everytown for Gun Safety, a nonprofit advocacy and research group.

Trustee grilled for more than eight hours Tuesday

Tuesday's hearing was particularly contentious, stretching on to nearly 11:30 p.m. ET. Attorneys for FUAC and Jones aggressively pressed Murray, who was on the stand for more than eight hours Tuesday, prompting multiple objections about badgering the witness and reminders from the judge to "maintain decorum."

Murray maintained that he was well within his authority to hold the kind of auction he thought would yield the highest value for creditors. He said he analyzed The Onion multiple ways and that any way you sliced it it was the higher and better deal for the creditors.

"Under all of those different scenarios and permutations, [The Onion's offer] was just better than the other," Murray said. "By a lot."

Jones' conspiracy-laden broadcasts go back some 25 years, and have included claims that the U.S. government was behind the 9/11 attacks. He was kicked off multiple social media sites in recent years, but he got a big boost when Elon Musk reinstated his Twitter (now X) account late last year.

Jones has been fighting to avoid losing his X account again, fearing it would be sold as part of his bankruptcy estate. Again, X showed up for Jones, arguing that the accounts belonging to X Corp., cannot be considered property of the estate and cannot be transferred or sold without X's consent.

The trustee and X announced on Monday they'd struck a deal that would allow Infowars' buyer to acquire the content from Infowars' X accounts, but not the accounts themselves. However, the judge's decision to reject The Onion deal now throws this issue, like everything else, back into question.

Bruce Markell, a former U.S. bankruptcy judge and now Northwestern law school professor, said the judge's decision was shocking and disappointing.

"It seems that the good was held hostage to the better," Markell said, and now "the costs of dealing with an obstreperous debtor [Jones] just keep mounting."

But Mattei, the attorney for the Connecticut families, insisted the families will not give up on forcing Jones to make good on what he owes.

"Soon, Alex Jones will begin to pay his debt to these families, and he will continue doing so for as long as it takes."