Judge says he must still approve sale of Infowars to The Onion

A federal judge said Monday he may hold an evidentiary hearing next month to help determine whether to approve the sale of conspiracy theorist Alex Jones’ media company to satirical publication The Onion.

Bankruptcy Judge Christopher Lopez in Houston clarified the sale, which comes after a Nov. 13 auction, remains in limbo until such a hearing, when interested parties can make their case and he can decide which of Jones’ assets, if any, can be sold. A date was not immediately set.

He also declined to immediately rule on Jones’ request for a temporary restraining order to disqualify the Onion’s bid, and said ‘whatever was status quo pre-auction remains status quo’ — essentially allowing Jones to remain broadcasting from his flagship platform, Infowars, for the time being.

‘Firing folks a week before Thanksgiving is not what we do, but it sounds like that’s not what occurred,’ Lopez said. ‘Folks are continuing to work.’

Another bidder, First United American Companies, a limited liability company affiliated with Jones’ dietary supplements business, had challenged the results of the auction after it said it bid twice as much cash as the Onion.

At stake is the ownership of Infowars’ intellectual property, including its website — the prized asset in the auction in which proceeds are largely meant to help satisfy defamation verdicts awarded to several families of the victims of the 2012 Sandy Hook Elementary School shooting.

The families won lawsuits against Jones in 2022 after he repeatedly called the massacre that left 20 children and six staff members dead in Newtown, Connecticut, a ‘hoax’ on his Infowars broadcast. He filed for bankruptcy in his home state of Texas in the wake of the nearly $1.5 billion in legal judgments.

Jones’ company, Free Speech Systems, was set to go to the Onion, which has often mocked him in its faux news coverage, after bankruptcy trustee Christopher Murray announced the winning bid.

But First United American Companies quickly contested the results, saying in an emergency filing attempting to block the sale that it had offered $3.5 million in cash — compared to the Onion’s $1.75 million.

The auction process approved by Lopez did not require Murray to automatically select the bidder that submitted the highest amount, and the trustee could reject the bid that was ‘contrary to the best interests’ of the estate creditors.

Lopez said Monday that the focus of an evidentiary hearing will be on Murray’s business judgment in regard to how the auction was held. He said he may decide to approve the sale, order another auction or hold additional hearings.

‘I want a fair and transparent process, and let’s see where that process goes,’ Lopez said, adding, ‘Everyone will have their day in court.’

At a prior court hearing following the auction, Murray said, ‘the creditors ended up significantly better off’ under the Onion’s bid. He also explained in a filing that the majority of Sandy Hook families were willing to forgo their share of the sale proceeds and instead take a percentage from future revenues from a revamped Infowars, which would allow the other creditors to collect more money.

The Onion estimates its total bid value is $7 million.

But Walter Cicack, a lawyer for First American United Companies, said in its filing that the arrangement amounts to a ‘Monopoly’ money bid since any future revenues are undetermined.

‘This was not simply collaboration,’ he said of the Onion’s support from Sandy Hook families, ‘this was outright collusive bid rigging.’

Chris Mattei, an attorney for some of the victims’ families, said in a previous statement that the Onion did ‘a public service’ by spearheading the purchase and ‘will meaningfully hinder Jones’ ability to do more harm.’

Lawyers for the Onion said in a filing Sunday that the company has been ‘harassed and threatened by the Debtor and members of his audience since their winning bid was announced.’ They argued that the sale should proceed, writing that a joint bid ‘does not amount to collusion’ and disputing the idea that there was a lack of transparency because the auction used a sealed bid process.

‘Sealed bids maintain the competitive tension between bidders and force bidders to offer up their best terms irrespective of where other bids sit,’ the lawyers wrote, adding, ‘Far from maintaining this process in secrecy, once the Trustee selected the Successful Bidder, the Trustee publicly disclosed all information about the Qualified Bids, including by disclosing copies of the initial and final bids submitted by each Qualified Bidder.’

Onion CEO Ben Collins — who previously covered disinformation and conspiracy theories for NBC News — had said on social media that while ‘the judge had some questions about process and assets,’ its ‘bid with the families is clearly the best.’

Collins also wrote that the Onion plans to relaunch Infowars as ‘the dumbest website on the internet.’ A person with knowledge of the sale told NBC News the new platform will include well-known internet humor writers and content creators. 

A poster for The Onion on a wall in Manhattan’s East Village on Nov. 17.Samuel Rigelhaupt / Sipa USA via AP

In announcing the sale, the Onion put out a news release written in the voice of a satirical CEO of Global Tetrahedron, the publication’s Chicago-based parent company.

Infowars was briefly shut down after the sale was announced before it resumed operating with Jones, who claimed the site was ‘hijacked.’

Meanwhile, Jones — who built a small media empire off of promoting conspiracy theories and misinformation — has claimed that Elon Musk and President-elect Donald Trump are investigating the bankruptcy auction in his favor after Musk’s X Corp. filed a notice of appearance in the case. X Corp. is presumed to be an interested party because Jones uses X to broadcast his show and the case involves the potential transfer of Jones’ X handle in the sale.

Lawyers for Jones filed a request last week for a temporary restraining order to invalidate the Onion’s bid, and asserted that First United American Companies should be the successful bidder. Jones described the auction process as ‘fraudulent,’ but told his audience that regardless of what happens with Infowars, he won’t be silenced.