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Alex Jones Stomps Out Of Bankruptcy After Failing To Scare Off Sandy Hook Plaintiffs
Above the Law has had fun with the Alex Jones bankruptcy. This was a scam from day one and I suspect that Jones will be paying the plaintiffs legal fees. The basic concept would be that these three shell debtors would cram down a plan where all of the plaintiffs would be forced to accept less than $10 million to be paid by Jones over a number of years in exchange for releasing Jones and his main company. The plaintiffs were seeking far more than $10 million per plaintiff against Jones and did not think that this was a fair deal and the US bankruptcy trustee filed a strong brief that this case was filed in bad faith.
Link to tweet
https://abovethelaw.com/2022/06/alex-jones-stomps-out-of-bankruptcy-after-failing-to-scare-off-sandy-hook-plaintiffs/
Alex Jones’s companies are exiting bankruptcy exactly the way they entered it: with maximum histrionics and accusations of bad faith.....
If it wasn’t clear from his prior bad conduct that Jones was simply using the bankruptcy court to evade trials in Connecticut and Texas — without having to put his personal assets and those of his main company Free Speech Systems at risk — his filings made no bones about it. Jones’s lawyers set up a Litigation Settlement Trust to “provide a mechanism for the payment in full of the litigation claims,” promising to fund it with $10 million cash from Jones, provided that the Sandy Hook plaintiffs accepted the money as payment in full and dropped their claims against FSS and him personally.
And in case there was any remaining ambiguity, Jones’s lawyer Norm Pattis flapped his yap to the Wall Street Journal, bragging that, “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. 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.”....
Which brings us to yesterday, where the LLCs made a great show of withdrawing from bankruptcy with the greatest reluctance in the world, protesting loudly about the scurrilous, untrue, not to say hurtful allegations that they had acted in anything less than good faith. The best faith! And they weren’t tapping out because the jig was up — they were being forced out virtually at gunpoint by the mean old Trustee.....
Indeed the motion concedes at multiple points that the primary purpose of the bankruptcy was to resolve the tort litigation: “Perhaps the U.S. Trustee believes that Jones should have been willing to contribute $7.7+ million for nothing, but that is not the way the world works outside of government,” his lawyers snark.
If it wasn’t clear from his prior bad conduct that Jones was simply using the bankruptcy court to evade trials in Connecticut and Texas — without having to put his personal assets and those of his main company Free Speech Systems at risk — his filings made no bones about it. Jones’s lawyers set up a Litigation Settlement Trust to “provide a mechanism for the payment in full of the litigation claims,” promising to fund it with $10 million cash from Jones, provided that the Sandy Hook plaintiffs accepted the money as payment in full and dropped their claims against FSS and him personally.
And in case there was any remaining ambiguity, Jones’s lawyer Norm Pattis flapped his yap to the Wall Street Journal, bragging that, “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. 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.”....
Which brings us to yesterday, where the LLCs made a great show of withdrawing from bankruptcy with the greatest reluctance in the world, protesting loudly about the scurrilous, untrue, not to say hurtful allegations that they had acted in anything less than good faith. The best faith! And they weren’t tapping out because the jig was up — they were being forced out virtually at gunpoint by the mean old Trustee.....
Indeed the motion concedes at multiple points that the primary purpose of the bankruptcy was to resolve the tort litigation: “Perhaps the U.S. Trustee believes that Jones should have been willing to contribute $7.7+ million for nothing, but that is not the way the world works outside of government,” his lawyers snark.
The pleadings and briefs were fun in this case and I loved the fact that Jones' attorneys feelings were hurt that no on believed that cheating the plaintiffs was a proper use of the bankruptcy court.
Judging from the briefs and the numerous hearings, Jones probably ran up $250,000 in legal fees and should end up paying the legal fees of the plaintiffs. This was an expensive scam attempt that failed
