By Dietrich Knauth
NEW YORK (Reuters) – A losing bidder linked to conspiracy theorist Alex Jones on Monday questioned Onion’s purchase of Jones’ Infowars website, saying the parody news site won a rigged bankruptcy auction and offered the half as much cash as your offer.
First American United Companies, which is affiliated with Jones’ dietary supplement businesses, asked U.S. Bankruptcy Judge Christopher Lopez in Houston to disqualify Onion’s bid and name its own $3.5 million bid as the winner.
Jones was forced to auction off his assets, including bankrupt Infowars, after courts ordered him to pay $1.5 billion for defaming the families of 20 students and six staff members killed in the 2012 elementary school massacre. Sandy Hook in Newtown, Connecticut, by making false claims that the shooting was staged.
First American United Companies said in a court filing that a court-appointed bankruptcy trustee mishandled the auction by giving Onion credit for support from the families of Sandy Hook shooting victims, whose lawsuits bankrupted Jones. in 2022.
“Its effect is to depress and reduce the amount that Onion would need to bid in cash to ensure it was the winning bid,” First American United Companies said in its objection. “This was not simply collaboration, it was openly collusion and bid rigging.”
The Onion’s winning bid for Infowars included $1.75 million in cash, according to the objection.
Christopher Murray, the bankruptcy trustee tasked with selling Jones’ assets, said in a court response Monday that First United American Companies’ objection was “the improper attempt by a disappointed bidder to influence an otherwise would be fair and open.” Murray said his team would not be bullied into accepting an “inferior offer.”
The Onion’s offer was valued at $7 million, largely because most Sandy Hook families agreed to accept a percentage of future revenue from the new Infowars rather than receive an advance payment from the sale, according to Murray. .
The Onion did not immediately respond to a request for comment. A representative for some of the Sandy Hook families declined to comment.
The Onion announced Thursday that it won a bankruptcy auction for Infowars’ assets and pledged to replace the website’s “relentless barrage of misinformation” with the Onion’s “notably less hateful misinformation.”
Lopez, who is overseeing the bankruptcy, said in a court hearing Thursday that he was concerned about the transparency of the auction. The judge said he will schedule an additional hearing to gather more information and consider whether to approve the sale.
Infowars was briefly shut down after the sale was announced, but was back online within a day. Murray had said at Thursday’s hearing that he closed the business to ensure its assets were not damaged or seized before ownership could be transferred to Onion.
If the sale is approved, Onion would acquire Infowars’ intellectual property, including its website, customer lists and inventory, certain social media accounts and production equipment.
Families of victims of the Connecticut-based Sandy Hook shooting said they agreed to waive part of paying defamation judgments to boost Onion’s bid and prevent other right-wing content creators from continuing to promote conspiracy theories on Infowars. Other families who sued Jones in Texas, some of whom have not yet gone to trial, did not agree to waive payment on Onion’s offer.
Jones claimed for years that the massacre was a hoax staged with actors as part of a government plot to seize Americans’ guns. He has since acknowledged that the shooting occurred, but the families, who said Jones profited from his lies for years, sued him for defamation.
Courts in Connecticut and Texas have ruled that Jones intentionally defamed the families. Lopez previously ruled that those judgments could not legally be set aside in bankruptcy, meaning Jones remains liable for most of the judgments even after Infowars is sold.