Alex Jones' company files for bankruptcy midway through Sandy Hook damages trial

[LetMyPeopleVote]

Alex Jones is trying to use subchapter 5 of Chapter 11 yet again. Subchapter 5 of Chapter 11 of the Bankruptcy Code is a fairly new provision designed for small bankruptcies and has a cap on the size of estate. Alex Jones has caused Free Speech Systemes to file now so as to try to avoid this cap

Link to tweet

https://www.texastribune.org/2022/07/30/alex-jones-company-bankruptcy/?utm_campaign=trib-social-buttons&utm_source=twitter&utm_medium=social

Alex Jones’ main company, Free Speech Systems, filed for bankruptcy on Friday, midway through a two-week trial to determine how much in damages the Texas-based conspiracy theorist will pay the parents of a Sandy Hook shooting victim. The filing is not expected to disrupt the trial to award damages for defamation taking place in Austin, which is set to resume Monday morning.

In the bankruptcy filing, posted by the Austin American-Statesman on Saturday, Free Speech Systems filed under a subchapter designated for small businesses, which a Sandy Hook families’ lawyer said is an effort to avoid oversight......

Free Speech Systems filed under subchapter five of the bankruptcy code, which is reserved for small businesses, defined as having less than $7.5 million in debt, aside from money owed to affiliates or insiders.

Of Free Speech Systems’ $79 million in liabilities, Moshenberg said he suspects much of that debt is to insiders, like Jones and his parents and children, and therefore would be exempt from the total debts to qualify as a small business.

Reynal did not immediately respond to a request for comment on Saturday. The Austin American-Statesman reported that Reynal told Austin District Judge Maya Guerra Gamble that the filing was done now so the size of the damage from the current trial can be provided to the bankruptcy court.

This is another fraudulent bankruptcy filing by Jones

[PortTack]

1. I take it this is a move to get out of paying?

[LetMyPeopleVote]

2. Subchapter 5 of Chapter 11 gives the bankrupt estates a ton of rights not available in Chapter 11

For example, the plan does not have to be approved by the creditors and can in effect be crammed down

The US trustee was against the use of this subchapter in the last attempt at fraud and it will be interesting to see what position the US trustee takes this time

[PortTack]

4. Thx for the explanation!

[LetMyPeopleVote]

5. This is from the article cited in the OP

This is another bankruptcy scam by Jones

That lawyer, Avi Moshenberg, told The Texas Tribune the filing’s timing is significant because he believes Jones hopes to declare bankruptcy as a small business, with limited debt, prior to the culmination of the current trial. The damages awarded would drastically increase the company’s debt, and eliminate the possibility of filing for bankruptcy as a small business.

“There's all sorts of protections that are supposed to be designed for a swift, quick bankruptcy with not a lot of oversight — the kind of oversight you’d see in a normal bankruptcy — because it's designed for small businesses,” Moshenberg said. He believes that Free Speech Systems hopes to take advantage of that lack of oversight.

[msongs]

3. bankruptcy is a legal way to cheat people nt