Families of Sandy Hook school shooting victims have quickly raised the alarm over the latest legal maneuver from far-right radio show Infowars and its proprietor, Alex Jones, Bloomberg News reported. The ultimate parent of Infowars, Free Speech Systems LLC, filed for chapter 11 bankruptcy on Friday just months after three corporate entities linked to Jones did the same in a failed attempt to corral and settle defamation damages owed to Sandy Hook families. In an initial hearing Monday, lawyers for the families expressed concern about the structure of the latest move and its timing — smack in the middle of a two-week trial in Texas that will put a dollar figure on the damages. Free Speech Systems is seeking a special type of bankruptcy protection that allows small businesses to speed through insolvency with relatively little input from creditors. Companies are typically only allowed to utilize that kind of proceeding if they owe less than $7.5 million. The Infowars parent has more than $50 million of debt, much of it owed to an entity owned by founder Alex Jones, according to court papers. Free Speech Systems syndicates the Infowars radio show — in which Jones frequently spouts conspiracy theories — and sells dietary supplements. The company generated revenues of about $65 million in 2021, most of which came from the sale of supplements, to post a net loss of about $11 million, court papers show. A lawyer for the U.S. Trustee, an arm of the Justice Department that polices bankruptcy court, in the hearing said he would urge the judge overseeing the case to slow down the process. “Transparency is 100% crucial in this case,” the lawyer, Ha Minh Nguyen, said. A committee of people suing Jones and Infowars may need to be formed in the bankruptcy, Nguyen added.
