- Infowars host Alex Jones must pay the parents of a Sandy Hook shooting victim $4.1 million in restitution.
- During his defamation trial, Jones said any damages of more than $2 million would “sink” his business.
- Legal experts told Insider that the argument is common, and bankruptcy could give Jones less control over Infowars.
After a Texas judge ruled that conspiracy theorist Alex Jones must pay the parents of a Sandy Hook shooting victim $4.1 million in defamation damages, the financial health of his Infowars channel is coming under scrutiny.
On Thursday, the judge awarded the parents significantly less than the $150 million they were seeking, although higher damages could follow. During the trial, Jones testified that any damages awarded above $2 million would “sink” his channel – despite the financials presented showing the channel was making almost $800,000 a day.
Jones had filed for bankruptcy protection last week. His company, Free Speech Systems, which operates Infowars, declared bankruptcy on Friday, halfway through the trial.
Legal experts told Insider that the strategy is not unusual, but that it may not protect Jones from having to pay full defamation damages and face long-term consequences.
“Jones may not be able to make the decision to leave by filing for bankruptcy,” Neama Rahmani, an attorney and former federal prosecutor, told Insider. “Generally speaking, judgments arising from intentional acts such as defamation cannot be discharged in bankruptcy.”
Filing bankruptcy can protect you from debt collectors and delay the immediate collection of damage payments, but it depends a lot on how the bankruptcy proceedings play out. Given his high profile and penchant for lying, Jones will likely face a lot of scrutiny, legal experts said.
“You have to actually be bankrupt. You can’t just say, ‘I’m bankrupt,'” Joshua Ritter, a Los Angeles-based criminal attorney, told Insider. “It goes through a hearing process and a judge decides what you’re worth, if after all, who do you have to pay.”
He added: “And they look after you. It’s not like you can file for bankruptcy and the next day start making millions again and keep it all for yourself.”
Jeff McFarland, a Los Angeles-based trial attorney who specializes in defamation cases, told Insider that Jones may try to do just that — and the parents who sued him could also be involved in the bankruptcy process.
“I’ve had cases where they filed for bankruptcy the morning I had to give the opening statement because they were afraid they were going to lose more than their company was worth and the process stayed,” McFarland told Insider. “The bankruptcy court is trying to find a way to keep the business alive, not put people out of work — but in this particular case — if it bankrupts the business, it could start another one the next day under a different name. I mean Alex Jones is Infowars.”
McFarland added that Jones could face a different kind of wrath by going that route, since his business is partially owned — or dissolved — by the parents who sued him.
“If there is a large creditor that comes up in this case, the family or someone else may be able to take over the business in bankruptcy as the number one creditor,” McFarland said. “They could take the assets, the business, the name, what it does, and they could shut it down as they see fit — you could lose control of your business. It could be a risky move.”