- Alex Jones is now two kinds of bankrupt,
morally and personally.
With hundreds of millions of dollars
of nutritional supplement sales to his name
as well as $1.5 billion in legal judgements,
the conspiracy theorist now says that he's broke,
by which he means he's forced to live on a paltry $10,000
a week that his company Free Speech Systems is paying him
now that it too has declared itself bankrupt.
Must be rough.
But is Jones really bankrupt or is this all a massive dodge,
or does he just need to take an extra dose
of Super Male Vitality pills
and show the haters what's what?
Now, Alex Jones had a bad year in 2022.
It started off in January when he was forced to testify
before the January 6th Select Committee,
and forgot how to spell his own name.
In August, a jury in Texas found him liable
for $42.5 million in damages to Neil Heslin
and Scarlett Lewis whose 6-year-old son, Jesse Lewis,
was killed in the 2012 Sandy Hook School massacre.
And in November, a group of Sandy Hook parents were awarded
more than $1.4 billion in compensatory and punitive damages
by a jury in Connecticut
after Jones called them crisis actors
and accused them of faking their own children's deaths
to gin up support for gun control.
Along the way, Free Speech Systems, the company Jones owns
and runs his Infowars show through, declared bankruptcy.
Then after the second jury verdict,
Jones himself filed for personal bankruptcy.
But on the plus side he's probably the first guy
to ever go on the air and call the judge
presiding over his case a quote "dwarf goblin."
- Even in third world dictatorships,
when they have kangaroo courts,
they don't have the judge tell the jury,
"This person is guilty."
But she says up there, "It's a special case."
And they're all caricatures of what you would imagine
in some alternate universe of dwarf goblins.
It's demonic.
They all act demonically possessed, the judge, the lawyers.
- Plus, thanks to Jones and his lawyers,
attorney Mark Bankston will probably never have
to buy himself a drink ever again
after his real life Perry Mason moment.
- So you did get my text messages and said you didn't.
Nice trick.
I mean, that's just--
- [Bankston] (chuckles) Yes, Mr. Jones, indeed.
You didn't give this text message to me.
You don't know where this came from.
Do you know where I got this?
- No.
- Mr. Jones, did you know that 12 days ago,
12 days ago,
your attorneys messed up and sent me an entire digital copy
of your entire cell phone with every text message
you've sent for the past two years.
And when informed, did not take any steps to identify it
as privileged or protected in any way.
And as of two days ago
it fell free and clear into my possession.
And that is how I know you lied to me when you said
you didn't have text message about Sandy Hook.
Did you know that?
- I, see, I told you the truth.
This is your Perry Mason moment.
- So, you know, there were some high points too.
But is Jones really bankrupt?
Well, it's complicated.
Now, there are several different kinds of bankruptcy
but for today we're only concerned with Chapter 11
a.k.a. reorganization.
This type of bankruptcy is for businesses
which could be profitable if they could just get out from
under some of their debts.
And in general, the business owner, known as the debtor,
remains in possession of the business,
meaning that they run the day-to-day operations
while negotiating with creditors
under the supervision of the court.
In Chapter 11 cases,
the government is represented by the US trustee,
an employee of the Justice Department
whose job is, quote, "to promote the integrity
and efficiency of the bankruptcy system for the benefit
of all stakeholders, debtors, creditors, and the public."
Which means all the things that you think it means
and also that the US trustee makes sure that the debtor
doesn't conspire with, say, one of the other creditors
to defraud either the government or the other creditors,
which may or may not become important to our story
in a moment.
- Ooh, thanks Freddy Foreshadowing.
- Now, Chapter 11 is a pretty expensive process
and if you're in bankruptcy,
by definition you don't have a lot of cash.
So in 2019,
Congress passed the Small Business Reorganization Act
to make it cheaper and faster for mom and pop businesses
without a lot of assets to get into and out of bankruptcy.
Call it Chapter 11 light or Subchapter 5 to its friends.
Now, originally this provision was intended
for businesses with debts under 2.7 million
but during COVID Congress raised the threshold
to 7.5 million in debts to unaffiliated entities;
that is, creditors unrelated to the debtor.
Can we get that Archer animated GIF again guys?
- Oh, thanks Freddy Foreshadowing.
- Thanks.
Now, every Subchapter 5 filing gets
its own special Subchapter 5 trustee
whose job it is to corral the creditors and the debtor
to reach a speedy consensus
to divide up the corporate assets
so that everyone can be on their merry way.
Even better, the court has the power to impose a cram down,
essentially forcing the creditors to accept
a lower valuation of their claims.
You can see why this would be appealing
to a company facing, say, $1.5 billion in damages
after its founder spent years calling the mass shooting
of children a hoax.
Now, in a normal world a company with that kind of debt
would be ineligible for Subchapter 5 bankruptcy.
But Free Speech Systems, the company which owns Infowars,
got it right under the wire racing into bankruptcy court
at the end of the first Sandy Hook tort case
before the jury had a chance to assess damages against it.
So why was the company claiming to be broke
and in need of protection by the bankruptcy court?
Well, it has to do with a Nevada shell company
known as PQPR Holdings Limited, LLC.
PQPR supplies the nutritional supplements
such as the 1776 Testosterone Boost
and Fizzy Magnesium drink powder that can bring in upwards
of half a million dollars a week in sales for Infowars.
I mean, what kind of idiots are actually buying
these nonsense, oh,
yeah, the kind of people that watch Infowars, right.
Now, in late 2021 when it became clear that Jones
was going to have to face the Sandy Hook plaintiffs in court
PQPR suddenly remembered
that it hadn't billed Free Speech Systems
for several years' worth of beet tincture
and Ultimate Bone Broth.
How do you forget to invoice
upwards of $50 million in goods?
That's, uh, that's a mystery we're gonna have to find out,
though I think we all probably know
what the answer is there.
But we do know that FSS executed two promissory notes
in 2021 securitizing debts to PQPR
totalling more than $53 million.
Essentially that put PQPR first in line
for the creditors to get paid.
But how can FSS be in Subchapter 5
which is for companies with debts under $7.5 million?
Well, there's an exception in the law for debts
to affiliate entities; ie, companies or individuals
who are related to the debtor and, surprise,
PQPR is wholly owned by Alex Jones
and his parents, David and Carol.
So it's excluded from that calculation
which is extremely convenient here since FSS,
which is wholly owned by Alex Jones,
can take advantage of the quick and dirty
mom and pop bankruptcy under Subchapter 5
while claiming that PQPR is entitled to be paid
of all of FSS's profits for the foreseeable future.
Basically Alex Jones gets to claim
that his right pocket, FSS, owes his left pocket, PQPR,
so much money that there's none left for anybody else.
Unsurprisingly, the Sandy Hook plaintiffs
are not happy about this.
In April of 2022, they filed a lawsuit in state court
under the Texas Uniform Fraudulent Transfer Act
alleging that the promissory notes are fraudulent
and that Jones personally siphoned $18 million
out of FSS between 2018 and 2021
as part of an illegal scheme
to make his company litigation-proof.
Now, the plaintiffs also challenged the PQPR debt
in bankruptcy court, urging the judge to reject
the promissory notes as fraudulent.
PQPR objected in a response, which consistently referred
to the movements as the Shady Hook Plaintiffs.
Just a glutton for punishment there.
They later amended to use the proper name of the school
where the plaintiff family members were slain.
US bankruptcy Court Judge Christopher Lopez
approved the plaintiff's motion and the Subchapter 5 trustee
is now investigating the PQPR notes.
The drug supplier is an active participant
in the FSS bankruptcy,
demanding an even greater share of the company's profits,
threatening to cut off the bone broth spigot
if it isn't paid and objecting to any and all oversight,
which stands to reason since Alex Jones and his parents
control both PQPR and FSS.
Meanwhile, back in Texas and Connecticut State courts
Alex Jones had a problem because he and FSS
were co-defendants in the Sandy Hook suits.
With FSS tied up in bankruptcy,
that left him on the hook for the entire $1.5 billion.
Now, the corporate shenanigans are interesting
in their own right,
but what about Jones's personal bankruptcy?
Well, meanwhile, back in Texas and Connecticut State Courts,
Alex Jones had a problem because he and FSS
were co-defendants in the Sandy Hook suits
but with FSS tied up in bankruptcy that left him
on the hook for the entire $1.5 billion judgment.
So on December 2nd Jones himself sought protection
from the bankruptcy court.
In one of his initial filings he claimed assets
less than $12 million including administrative costs due
from FSS to Jones of approximately $1 million.
He also made it clear that he doesn't intend to give up
his show and he intends to use the bankruptcy to force
the Sandy Hook plaintiffs to accept a massive haircut
on their legal settlements.
- I'm gonna make him an offer he can't refuse.
- In a status report, Jones's lawyers said, quote,
"While Jones comes to this court in good faith
and wants to reach an amicable resolution
between all the parties,
it is imperative that all parties do the same.
Any argument that Jones must give up his public life
or discontinue public discourse is contrary to supporting
his ability to fund a plan and pay creditors,
leaving Jones with limited options.
Jones's intention is to continue his broadcasts
and The Alex Jones Show,
and simultaneously proceed with this Chapter 11,
acting in the best interests
of the estate and the creditors,
participating in good faith in the mediation process,
and fulfilling all obligations for information transparency
in pursuit of a fair and reasonable
compromise and settlement."
He claims to be, quote, "in the process of hiring
and educating a reputable financial advisor"
to clean up the mess in his personal
and business bookkeeping,
which definitely 100% is not his fault.
His lawyers also argue, quote,
"Jones's attention over the last few years
has been focused on his talk show and his family,
and thus his personal finances somewhat disorganized,
are being reviewed and analyzed to ensure clarity
and integrity of information going forward.
Jones and FSS lost a great deal of money trusting people
who did not have the ability or the character
to handle the finances."
They also claimed that he fronted $10.3 million
to keep FSS afloat in the past year
although according to the Sandy Hook plaintiffs
FSS was at the same time shoveling a mountain of cash
out the door to PQPR in amounts as high as $11,000 per day.
There's also reporting that anonymous donors
sent Jones $8 million worth of Bitcoin in 2022,
cash which he pocketed according to the testimony
by his corporate representative in the Connecticut trial.
But it's clear that there's money floating around somewhere
and we know that because lawyers in bankruptcy
have to disclose their compensation
and Jones has two law firms representing him in this case.
Attorney Shelby Jones says that he receives $688,000
to represent Jones in the proceeding
prior to filing the bankruptcy petition.
While attorney Vickie Driver says that she's agreed
to accept half a million dollars for her services
of which she's already been paid $48,000.
But none of the money already paid came from Jones himself.
Instead, the source was a mysterious entity
known as the Missouri779384 Trust.
Now, at this point you're probably asking yourself,
"What is the Missouri779384 Trust and where
did it get $700,000 to spend on Alex Jones' legal bills?"
That is a very, very good question,
and the answer is Alex Jones knows, but he's not saying.
So what is Alex Jones saying?
Well, he's saying:
- Money, please.
- On December 16th, Jones filed a motion demanding
to be paid his entire $1.3 million annual salary
from FSS rather than the measly $10,000 per week
authorized by the court in bankruptcy.
Jones's lawyers wrote, quote, "The amount authorized
for FSS's payments of Jones's salary in the interim orders
to date is a severe reduction from the salary Jones is due
under the Agreement," before adding that their client,
quote, "wholly fulfilled his employment obligations
to render the content creation, advertisement,
and promotional services" under the employment contract
from April 14th, 2022, and, quote, "continues to expend
personal funds for FSS expenses."
Yes, that's right.
Jones wants to be reimbursed for any money that he advanced
toward the company of which he's the sole owner
and which he claims is bankrupt
thanks to a $50 million debt to himself.
Now, the court has shown limited patience
for Jones's monetary demands.
Back when Free Speech Systems first filed for bankruptcy
he requested reimbursement for $172,000
of un-itemized expenses accrued on a company credit card
which he used to pay for things like
housekeeping at his personal residence.
Judge Lopez denied the expense refusing to let FSS pick
up the bill but at a December 19th hearing
the court was more receptive to Jones's argument
that there is no FSS without him as the pitchman.
And the court's job here is to maximize the estate;
ie, the pot of money that can be used to pay off creditors.
So while the Sandy Hook plaintiffs,
as well as the US trustee and the Subchapter 5 trustee,
unanimously objected to raising Jones's compensation,
the court pointed out
that if Jones stops showing up for work
Infowars won't be able to sell any more
Brain Force Plus pills and the whole operation
would grind to a halt which would affect the ability
to pay off all the creditors.
Quoting Judge Lopez, quote,
"Revenue was generated through the sale of product,
and he's the guy who can sell it."
But Jones's lawyer Vickie Driver
made a fairly unsubtle threat that Jones might just
take his krill oil hawking skills elsewhere
if the court won't pay the bill, saying, quote,
"Right now, Mr. Jones can and may be forced
to take third-party employment if he cannot make
what he needs to survive."
At the hearing Judge Lopez postponed the decision
on Jones's salary for another month
and in an emergency motion filed two days later,
Jones again demanded that the court restore
his full salary under the terms of the employment agreement
as he signed with himself as 100% owner of FSS.
Basically, he demands no reduction in money due to him,
unlike the Sandy Hook plaintiffs whom he insists
will have to take a big haircut.
And in another emergency motion filed the same day
in his personal bankruptcy case,
Jones demanded that the court authorized utility payments
to keep the lights and internet on at his properties.
These include three condominiums in Austin
and a lake house in Travis County,
as well as his personal residence in Austin,
which he transferred to his wife's name in February of 2022.
Jones's lawyers argue that protecting his, quote,
"individual wellbeing as well as his children's
and the continued operations of his businesses"
require maintaining subscriptions to Netflix, Hulu,
HBO Max, and Firestick,
and will run to almost $5,000 monthly,
which is a lot of TV for a guy who regularly rails
against the deep state Hollywood.
Now, he also had quite a bit to say on his own show
about his pending legal troubles.
Jones watched the verdict being read out live,
laughing as he assured his audience that it could safely
stock up on Ultra Blue aromatherapy oil
without worrying that the proceeds would go
to grieving parents of slain children.
And in a pre-Christmas message,
Jones explicitly characterized these Subchapter 5 filing
as a means of waiting out the Sandy Hook plaintiffs
and denying them any recovery.
- Now remember, I'm in bankruptcy.
We got two years of appeals.
The money you donate does not go to these people.
It goes to fight this fraud
and it goes to stabilize the company.
- He did not state that it goes to pay off
a $50 million debt or possibly "debt" to PQPR,
a company owned by Jones and his parents.
Jones went on to warn his followers not to believe
the story his own lawyers are painting in court
of an operation running deep in the red
and facing financial ruin, or at least not to the extent
that they give up hope and quit sending him cash
for Superblue Fluoride-Free Toothpaste.
On a show Jones shouted:
- We are in bankruptcy to try to get through this
and to try to minimize the bills
and then a bunch of the audience thinks,
"Well, he's going off air, I'm not gonna support."
No, it's Chapter 11, Subchapter 5.
All we gotta do is have a plan, make it through the plan,
and we stay on air indefinitely and they can't shut us down
and we get our appeals.
- Implying that selling just a few more vials
of Lung Cleanse Plus would mean the difference
between life and death for the site.
Now, this is a risky gambit for someone who already
got chased out of bankruptcy court after placing
three worthless shell companies in chapter 11 last April
in what the US trustee described as, quote,
"classic bad faith filings," which, quote,
"were filed to gain a tactical advantage
in the Sandy Hook Lawsuits," using, quote,
"a novel and dangerous tactic that is abusive
and undermines the integrity of the bankruptcy system."
And you might recall that Jones's obnoxious behavior
and defiance of court orders already got him sanctioned
by both Sandy Hook state judges and his comments on air
about pending litigation have come back to bite him
in the past.
That first bankruptcy case was derailed in part
because his attorney Norm Pattis
accused the Sandy Hook families of staging a, quote,
"macabre morality play,"
admitting to the Wall Street Journal that Jones was, quote,
"turning to the bankruptcy courts to compel
the plaintiffs to estimate the value of their claims
in open court by discernible evidentiary standards."
And when Jones and Infowars host Owen Shroyer discussed
the Texas case on air during the trial
with Jones deriding the jury as, quote,
"extremely blue collar folks"
who "do not know what planet they're on"
and describing the father of the slain child
as slow and on the spectrum,
the plaintiffs immediately played that video in open court
- And hitting, let's just say this,
extremely blue collar folks
where people do not know what planet they are on.
- So it's a pretty safe bet that the Sandy Hook plaintiffs
are going to tell Judge Lopez about the latest video
of Jones suggesting that Infowars is financially stable
and the bankruptcy is simply a means to stiff his creditors.
And on December 22nd
Connecticut's Superior Court Judge Barbara Bellis refused
to overturn the massive jury award ruling that the jury,
quote, "discharge its obligations conscientiously,
dutifully, and according to the state's instructions
on the law to be applied."
Now, Jones has already filed appeals of both cases
seeking to overturn the verdicts,
or at least get the awards reduced.
But with this much money on the line,
the plaintiffs have every incentive to ignore Jones' threats
to get them to negotiate.
And they're also trying to convince Judge Lopez to rule
that the PQPR notes were fraudulent transfers
made with the intent of looting the company
in preparation for litigation and bankruptcy.
And meanwhile, Jones will show up every day
to flog HGH Max Boost and Super Male Vitality nonsense,
promising that none of the money will ever go
to the plaintiffs and whining about scraping by
on a mere $520,000 per year,
plus $5,000 a month for utilities.
- Uh, yes, naturally I can't pay you much of a reward
because I'm strapped for cash.
(coins clank)
- Now, there are gonna be a lot of interesting twists
and turns in the Alex Jones bankruptcy in the coming months
but one thing is for sure, it's going to be a lot of fun
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