Judge blocks The Onion’s purchase of Alex Jones’ Infowars

By Hadas Gold, CNN

(CNN) — A bankruptcy judge has blocked The Onion’s winning bid for Alex Jones’ Infowars conspiracy platform, citing concerns with the auction process which he says left money on the table.

“I’m going to not approve the sale to the purchaser. I think there’s a great lack of clarity here,” Judge Christopher Lopez, a bankruptcy judge for the Southern District of Texas, said during the ruling on Tuesday.

Lopez said the process “while well intended, simply did not maximize value in any way based upon the record before me.”

Last month, a court-appointed trustee said the satirical news site won the auction to acquire Infowars’ parent company Free Speech Systems, which was sold off as part of a defamation settlement after Jones falsely called the Sandy Hook Elementary School massacre a hoax.

The Onion’s bid was backed by the families of eight victims of the school shooting and one first responder. According to court documents, The Onion, via its parent company Global Tetrahedron, offered $1.75 million in cash along with a “credit” from the Connecticut families, who offered to forgo 100% of their portion of the winning bid to support the effort, valuing the bid at $7 million.

The one other competing bid, at $3.5 million in cash, came from First United American Companies, which is affiliated with Jones and operates his lucrative online nutritional supplements store.

But Lopez said he took issue with the auction process. The court-appointed trustee in the case, who had wide discretion to handle the auction and chose the winner based on his own judgement, had initially said there would be a live auction.

But that process was then changed to sealed “best and final bids.” After The Onion was declared the winner, Jones and First United American Companies sued to stop what they called a “Frankenstein” bid because of the credit pledged by the families and other complaints about the auction process.

A two-day hearing took place, with witnesses called to discuss the auction process and the bids involved. The testimony stretched late into the evening on Tuesday, when Lopez ruled at nearly 10:30 p.m Central Time.

‘Every last dollar’

While Lopez said he had no problem with the makeup of The Onion’s bid and that everyone acted in “good faith,” he believed the trustee “left a lot of money on the table, or potential for a lot of money on the table, potential for a lot of negotiation on the table” because of the auction process and because other bidders did not know about the competing bids. Lopez said the trustee should “scratch and claw” for every last dollar.

Jones was previously ordered to pay nearly $1.5 billion to families of the Sandy Hook shooting victims. But he has dragged his feet on paying any of that judgment, even as court records show he continued spending tens of thousands of dollars a month.

Everything from the platform’s studio equipment, online dietary supplement store, a Terradyne armored truck, its social media accounts and even a Winnebago motorhome was up for sale to the highest bidder.

Jones had used Infowars to spread some of the most disturbing and disgusting lies and conspiracy theories into the public discourse. And he enriched himself with millions of dollars in the process, profiting off a commerce engine he built off of the fear that he peddled on his platform.

Ben Collins, the CEO of The Onion, said in a statement that they are “deeply disappointed” in the decision, but “will continue to seek a resolution that helps the Sandy Hook families receive a positive outcome for the horror they endured.”

“We will also continue to seek a path towards purchasing InfoWars in the coming weeks. It is part of our larger mission to make a better, funnier internet, regardless of the outcome of this case,” he added.

‘Pay his debt’

In a statement, Christopher Mattei, an attorney for the Connecticut families, said they are “disappointed” in the decision.

“These families, who have already persevered through countless delays and roadblocks, remain resilient and determined as ever to hold Alex Jones and his corrupt businesses accountable for the harm he has caused,” he said. “This decision doesn’t change the fact that, soon, Alex Jones will begin to pay his debt to these families and he will continue doing so for as long as it takes.”

It’s not clear what happens next for Infowars. Lopez ordered the court-appointed trustee to go back and work out what he wants to do next, although he noted he doesn’t think it “makes sense” to open it up again for another auction.

“I’m going to have to get a lot more comfortable before folks start spending a bunch of money, and we have another two-day hearing questioning business judgment,” he said.

No matter the outcome of this sale, Jones still owes more than $1 billion to the families, although he has appealed the ruling.

On his show on Tuesday evening, Jones celebrated the decision, saying “we can celebrate the judge doing the right thing with the most ridiculous fraudulent auction known in human history.”

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