A company affiliated with conspiracy theorist Alex Jones asked a federal judge Monday to throw out a bid from satirical news outlet The Onion to buy Jones’ company Infowars at a bankruptcy auction, citing fraud and collusion.
First United American Companies, affiliated with Jones’ website that sells nutritional supplements, was the only other bidder in the latest auction, offering $3.5 million. In a filing in federal bankruptcy court in Houston, the company’s attorney asked a judge to declare it the winning bidder instead of The Onion.
Attorney Walter Cecak claimed that the bankruptcy trustee overseeing the auction improperly colluded with The Onion and the families of the victims of the Sandy Hook Elementary School shooting in Connecticut in naming The Onion the winning bidder. Cicack also claimed the trustee violated sale rules set by the judge, and said the company’s cash offer was twice the amount offered by The Onion.
FILE – Right-wing conspiracy theorist Alex Jones speaks to the media after arriving at federal court for a hearing before a bankruptcy judge Friday, June 14, 2024, in Houston.
David J. Philip/The Associated Press
The bankruptcy auction was held last week as part of the divestment of Jones’ assets, including Infowars. Proceeds from the sale will go to the Sandy Hook families and other creditors. Jones declared bankruptcy in 2022 after he was ordered to pay nearly $1.5 billion in defamation lawsuits brought by families describing the 2012 shooting that killed 20 children and six teachers as a hoax orchestrated by actors to increase gun control.
Ben Collins, CEO of The Onion’s parent company, Chicago-based Global Tetrahedron, issued a statement Monday through a spokesperson.
“Obviously we’re disappointed that he’s attacking by creating conspiracies, but we’re not surprised either,” he said, referring to Jones.
The bankruptcy trustee appointed to oversee the sale, Christopher Murray, declined to comment Monday. The Sandy Hook family’s attorney, Christopher Mattei, also declined to comment.
In a response filed with the court later Monday, Murray described the allegations as “baseless.” He said First United American’s motion to exclude The Onion was “an improper attempt by a frustrated bidder to influence a fair and open auction process.”
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Murray also wrote: “Having failed in its previous efforts to bully the trustee and its advisors into accepting its lower bid, FUAC now alleges, without evidence, collusion and bad faith in an attempt to mislead the court and exclude its sole competitor in the auction.”
Murray filed separate court papers on Monday asking a judge to approve the sale of Infowars to The Onion.
An additional layer to be resolved in the sale came last week, when lawyers for X Corp, the group created by Elon Musk when he bought Twitter, also filed a notice of appearance in Jones’ bankruptcy case.
The recording, first reported by Mother Jones, dates back to November 14 It does not reveal the purpose of X’s interest in the caseother than saying that they are an interested party and have requested all relevant documents in the case.
Before Musk bought Twitter, Jones and Infowars were banned from the platform for violating its user terms. However, Musk reinstated Jones once Twitter (X Now) was under his control.
Collings used X to call out Jones over the weekend for his assertions that the auction had been officially cancelled.
“Apparently, when the current operators of InfoWars returned to operating as a company, they used it to falsely say the auction was canceled and claim some really bizarre things,” he wrote.
The First United American Companies filing on Monday included The Onion’s formal offer, which revealed that it offered $1.75 million to Infowars along with certain incentives from the Sandy Hook families that won their defamation suit against Jones. The families agreed to assign and award up to 100% of their share of the proceeds from the sale of Infowars to Jones’ other creditors.
Through the families’ offer, Jones’ other creditors would receive a total of $100,000 more than they would if First United American Companies bought Infowars, according to The Onion’s offer document.
Murray told a bankruptcy judge during a court hearing Thursday that the families’ incentives made it a better offer than the one made by Jones’ company.
“The creditors ended up much better off,” Murray told the judge, adding that one of his responsibilities was to maximize value for creditors.
Judge Christopher Lopez, who said he had questions about the sale and concerns about transparency, ordered a hearing to find out exactly what happened at the auction and how the trustee chose The Onion. The date of the session has not been set.
Jones criticized the sale process on his show and social media sites, describing it as “rigged” and “fraudulent.”
Over the weekend, Collins posted a series of comments about the auction on X, formerly known as Twitter.
“Out of the way: we won the bid and — you won’t believe it — the previous InfoWars team didn’t handle it well,” he wrote.
Collins said last week that The Onion planned to turn Infowars into a parody site, targeting conspiracy theorists and other social media personalities while promoting gun violence prevention efforts.
Cicack also said in Monday’s court filing that the trustee improperly changed the auction process “from a live auction to a secret process.” After the sealed bids were submitted on November 8, it was expected that there would be a round of live bidding on November 13, Cicak said.
But instead, Murray said, he decided to ask the bidders to submit another offer as the last and best offer, which they did. Murray then chose from those final bids without holding a round of live bidding. Murray was alleged to have violated auction rules.
Lopez’s 20-page order on sale procedures, issued in September, made this live bidding round optional. It gave Murray broad authority to conduct the sale, including the power to reject any offer, whatever its price, that was “contrary to the best interests” of Jones, his company and their creditors.
Cicack called the Sandy Hook families portion of The Onion’s show worthless “monopoly” money.
“It is also the product of Onion’s impermissible collusion in an attempt to manipulate the auction with the goal of achieving a specific outcome desired by Connecticut families,” he wrote.
— With files from international news
