A bankruptcy court ruled on Tuesday that the auction procedure was unfair, rejecting The Onion’s parent company’s offer to purchase Alex Jones’ far-right media empire, which includes the website Infowars.
After a two-day hearing, U.S. Bankruptcy Judge Christopher Lopez declared that Global Tetrahedron, the parent company of The Onion, had not placed the highest offer and had been mistakenly declared the winner of an auction last month by a trustee assigned by the court.
In a late-night decision from the bench in a Houston court, Lopez stated, “I don’t think it’s enough money.” “I will not authorize the sale.”
It wasn’t immediately apparent if The Onion would be able to place another offer for Jones’ assets at a future auction. Lopez stated that he would let Christopher Murray, the trustee who had presided over the auction, decide what to do next.
Murray conducted the auction in which The Onion’s parent company originally seemed to win in good faith, according to the court. However, he ruled the trustee did not conduct a transparent process and ought to have allowed a competing bidder connected to Jones another chance to raise its offer.
Lopez stated, “I think you have to go out and try to get every dollar.” “I believe that the procedure failed.”
The decision put an end to Global Tetrahedron’s ambitions to take over Infowars and drastically change its content from conspiracy theories against the government to sarcastic humor, at least for the time being. Rather, Jones may carry on with his decades-old far-right media company.
“We can celebrate the judge doing the right thing,” Jones said in a live broadcast from a studio shortly after the decision. In the past, he has called the transaction procedure a “fraudulent sale” and “auction fraud.”
Despite being “deeply disappointed,” Onion CEO Ben Collins stated in a statement on X that the firm will “continue to seek a path towards purchasing InfoWars in the coming weeks.”
Regardless of how this lawsuit turns out, he stated, “It is part of our larger mission to make a better, funnier internet.”
Collins went on, “We are disappointed that everyone was sent back to the drawing board with no winner and no clear path forward for any bidder, but we appreciate that the court repeatedly recognized The Onion acted in good faith.”
Collins used to cover conspiracy theories and misinformation for NBC News, which frequently involved covering Jones.
The families of the Sandy Hook school massacre victims, who successfully sued Jones for defamation and won court verdicts now worth $1.2 billion, joined forces with the parent company of The Onion in their effort. The company’s strategy for Infowars included designating Everytown for Gun Safety, an anti-violence group, as the sole advertising.
The Connecticut families, according to their lawyer Chris Mattei, were similarly let down.
In a statement, he added, “These families, who have already endured innumerable setbacks and obstacles, are strong and unwavering in their resolve to hold Alex Jones and his dishonest companies responsible for the damage he has caused.”
“Alex Jones will soon start making payments on his debt to these families, and he will do so for as long as it takes,” Mattei stated, notwithstanding this decision.
Fans of both Jones and The Onion were astonished when the media and the public learned last month that Global Tetrahedron had won the auction. However, Lopez, who is in charge of Jones’ bankruptcy case, had to approve the announcement, which was just a trustee’s suggestion.
In addition to $1.75 million in cash, several of the bankruptcy case creditors, including the relatives of the Sandy Hook massacre victims, pledged noncash to forgo the sale revenues, which made up the Global Tetrahedron offer. In their bid, a few of the families joined forces with The Onion.
Murray stated that he thought the proposal was worth a total of $7 million.
First United American Cos., a competitor bidder connected to Jones, made a cash offer of $3.5 million, which was twice as much as the parent company of The Onion. Jones approved the proposal from First United American, a limited liability corporation connected to his nutritional supplement firm.
First United American attorney Walter Cicack said in court on Tuesday that the second part of the Global Tetrahedron offer was made up of “amorphous, non-cash currency.” He claimed that his client’s all-cash offer ought to have prevailed.
In court, he declared, “Cash is cash.” Lopez said that the Sandy Hook family and other creditors might have received more money through an alternative procedure. He stated, “I don’t even think the $3.5 million is enough.”
Control of several assets from Jones’ firm, Free Speech Systems, is in jeopardy. These assets include the infowars.com intellectual property, production tools including computers and studio lighting, and inventory from Jones’ nutritional supplement company.
Jones owes the relatives of the Sandy Hook massacre victims $1.2 billion, which is why his assets are being liquidated in bankruptcy. The family successfully sued Jones for defamation and other charges after he repeatedly and falsely claimed that the massacre was a fabrication.
Murray defended his auction method in testimony before the Houston bankruptcy court. He said that his sole objective was to increase the amount paid to Jones’ company’s unsecured creditors.
“I’ve followed an open procedure. He declared, “I haven’t barred anyone from taking part. He said, “No, no bias,” when asked by a lawyer if he had any preferences about the winner of the auction.
A written, sealed bid request was the first step in the auction procedure. Murray thought about holding a live auction at first but changed his mind. He stated in his testimony that he worked with Global Tetrahedron and its attorneys to finalize the terms about the creditors relinquishing their portion of the proceeds after concluding that the company’s bid was greater.
In his decision, Lopez stated that while the waiver clause alone did not disturb him, the other bidder had to have been made aware of it. Additionally, he said that the subsequent ironing-out process, in which Murray engaged in “mental gymnastics,” upset him.
Speaking of the trustee and the auctioneer, he remarked, “It didn’t even feel like they understood what they understood.”
In court, Jason Goldstein, an attorney for The Onion’s parent business, stated that the postponement following the auction’s completion had been expensive.
Prior to the decision, he stated, “My clients have had to deal with this delay at a significant additional cost.” “They still don’t have clarity or a solution, and they’re stuck here today.”
