DOJ implicates Alex Jones in potential 'abuse of the bankruptcy system' just before court hearing

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I have read both the DOJ Trustee filing and the filing by the CT. Plaintiffs. I have not seen the filing by the Texas plaintiffs represented by Juanita Jean's son. Jones is trying to pull a fast one and is being called out.

Link to tweet

https://www.rawstory.com/alex-jones-bankruptcy/

The United States Department of Justice issued a warning on Thursday that InfoWars founder Alex Jones's emergency bankruptcy filing is potentially an "abuse of the bankruptcy system."

As reported by the New York Times' Elizabeth Williamson, a regional DOJ trustee in Texas has filed an objection to Jones's bankruptcy declaration, which it claims may be a sham to avoid paying financial compensation to the families of children who were murdered at the Sandy Hook Elementary School in 2012 and whom Jones falsely accused of being "crisis actors."

According to Williamson, the DOJ is asking "why aren't Jones and his company, both defendants in Sandy Hook defamation suits, named as debtors," while also pointing out that Jones asked the bankruptcy court to "approve a paltry 'litigation settlement trust' without any input by the families, nor any view of his finances."

The filing comes one day before Jones's bankruptcy case is scheduled to be heard in court.

Chapter 5 is a recent addition to the bankruptcy code and Jones is trying to pull a fast one

[LetMyPeopleVote]

1. Justice Department, Sandy Hook families question Infowars bankruptcy

This will be fun to watch

Link to tweet

https://www.politico.com/news/2022/04/21/justice-department-sandy-hook-families-question-infowars-bankruptcy-00027079

The Justice Department and attorneys for families of victims of the Sandy Hook school shooting are questioning the legitimacy of attempts by right-wing talk show host Alex Jones to put several businesses in his media empire into bankruptcy just as a trial was set to open in Texas, where he faced the possibility of being ordered to pay millions of dollars in damages.,,,

The Justice Department’s Office of the U.S. Trustee told Judge Christopher Lopez the structure of Jones’ filing “may demonstrate these cases are an abuse of the bankruptcy system.” The government submission questioned why Jones had not filed for personal bankruptcy and why another business he controls, Free Speech Systems, was not included in the filings earlier this week.

“Why didn’t Alex Jones or FSS file for bankruptcy relief when Debtors did? They are both defendants in the same litigation as Debtors, and all of them have been found liable in those cases,” attorneys Jayson Ruff and Ha Nguyen wrote for the Justice Department unit. “It appears that Jones intends to leverage the bankruptcy filings of his holding companies to extend the automatic stays of pending litigation against Debtors to him and FSS, while he maintains full control of FSS and its assets going forward. Thus, this Motion … seems to be just the first step for Debtors to carry out Jones’s and FSS’s scheme of avoiding the burdens of bankruptcy while reaping its benefits.”

Lawyers for the Sandy Hook families made similar arguments that Jones is making an “illegitimate” attempt to dodge or delay the financial consequences of his false claims about the 2012 attack.

“What Jones and his affiliates want to avoid is the wisdom of juries that would have liquidated his liability and the liability of his affiliates,” the families’ attorneys wrote.

[TexasTowelie]

2. From the Austin American Statesman:

Judge reluctantly delays Alex Jones trial in Sandy Hook case, criticizes his lawyers
https://www.statesman.com/story/news/2022/04/20/austin-tx-judge-delays-alex-jones-sandy-hook-trial/7382689001/

There are a number of comments in the article from Mark Bankston that I believe will interest you.

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3. This is from the DOJ trustee motion

Link to tweet

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4. Alex Jones's Bankruptcy Lawyer Indignant That Sandy Hook Plaintiffs Aren't Grateful He Spared Them

This a subchapter 5 case filed under Section 11 of the bankruptcy code. Bankruptcy in general is very favorable to the debtors and subchapter 5 is a new creation that strives to be even more favorable to the debtors. Only the debtor gets to propose a plan and there are a ton of limitations on some of the normal protection for creditors. This proceeding is limited to small bankruptcies with less than $7.5 million in debt Jones and Free Speech System are not party to this sham bankruptcy because they have too much debt. This bankruptcy is a stunt. The US Trustee actually file a motion calling this proceeding a sham
https://storage.courtlistener.com/recap/gov.uscourts.txsb.455827/gov.uscourts.txsb.455827.18.0.pdf

Why didn’t Alex Jones or FSS file for bankruptcy relief when Debtors did? They are both defendants in the same litigation as Debtors, and all of them have been found liable in those cases—in unliquidated amounts. Moreover, Debtors’ assets are estimated to be virtually nil for a case of this significance ($50,000), while Alex Jones and FSS are fully funding the administrative expenses of these bankruptcy cases without filing themselves. Why? It appears that Jones intends to leverage the bankruptcy filings of his holding companies to extend the automatic stays of pending litigation against Debtors to him and FSS, while he maintains full control of FSS and its assets going forward. Thus, this Motion to appoint the trustees for the Litigation Settlement Trust seems to be just the first step for Debtors to carry out Jones’s and FSS’s scheme of avoiding the burdens of bankruptcy while reaping its benefits.

Juanita Jean (her son is the main litigator in the Texas cases), my son (he is a partner is biglaw firm and I had fun listening to this proceeding. Jones has found some low life attorneys to represent him and these idiots actually were offended that the plaintiffs/victims of his torts were not happy with Jones' shitty offer.

Link to tweet

https://abovethelaw.com/2022/04/alex-joness-bankruptcy-lawyer-indignant-that-sandy-hook-plaintiffs-arent-grateful-he-spared-them-their-day-in-court/

“We’re turning to the bankruptcy courts to compel the plaintiffs to estimate the value of their claims in open court by discernible evidentiary standards,” Alex Jones’s lawyer Norman Pattis told the Wall Street Journal on Wednesday. “The plaintiffs have turned this litigation into a macabre morality play and have refused to negotiate in good faith. We hope they will show respect to the federal courts.”

Admitting that your client is placing three worthless companies into a sham bankruptcy for the express purpose of stopping a jury from assessing damages is a weird flex. But why should anything about this freak show be normal, right?....

But then the attorneys for the Texas and Connecticut plaintiffs got up to argue that the bankruptcy shouldn’t be allowed to go forward at all, since it was clearly a ploy to escape liquidated damages in Connecticut, where a jury trial was due to take place later this year, and Texas, where trial was set for this coming Monday. And furthermore, three companies with no assets which appear to conduct no business at all are not appropriate vehicles for subchapter V bankruptcy under 11 U.S.C. § 101(51C), they insisted.

At which point Kyung Shik Lee, attorney for the supposedly bankrupt Jones entities, got up and ranted indignantly at the Sandy Hook plaintiffs that this was the first offer of money that they’d seen in ten years, and he’d heard nothing but complaints about his generous offer to pin their arms behind their backs and deny them their day in court.

The plaintiffs only filed their cases in 2018. Lest we forget, what happened ten years ago is that a gunman opened fire at an elementary school, killing 26 people. After which Mr. Lee’s client spent a year telling his deranged audience that the plaintiffs were simply pretending their children had been murdered, subjecting them to vicious harassment and death threats that forced at least one of them to go into hiding for his own safety.

Nevertheless, Lee insisted that “bankruptcy code and courts are the appropriate vehicle” for resolving “a sad and complex situation” which was actually on the eve of being decided by a jury. In fact, he continued, the Sandy Hook plaintiffs should thank Jones for his “good faith effort here to do something constructive with the bankruptcy process,” since otherwise the Texas plaintiffs might get all the money by dint of getting to the courthouse first. There are “limited funds and we’re trying to maximize it so it goes to the plaintiffs” he huffed, seeming hurt and offended that someone might suggest he had anything but the purest motives.

According to my son, Lee mainly does bankruptcy committee work where you represent creditors or other parties in various committees in a bankruptcy. It seems that Committee attorneys tend to like to bluster and raise a fuss to try to get more money for their clients. Committee attorneys are not responsible for structuring the case and play a role in negotiating the plan used to get the debtors out of bankruptcy.

This was an interesting hearing. Jones' attorneys are assholes. My son explained the bankruptcy process to Juanita Jean and she decided that she did not need to call her son to get his explanation. My son does restructure work at a large fir and has been in a good number of bankruptcy hearings.