Alex Jones faces huge opportunity to hide assets after $1 billion Sandy Hook ruling

Oct 14 (Reuters) – Right-wing conspiracy theorist Alex Jones has vowed to fight a nearly $1 billion libel verdict against him, but experts say there will be neither bankruptcy nor an appeal against a Connecticut jury’s findings likely to salvage his personal fortune and media empire on Wednesday.

A jury in Waterbury, Connecticut state court ruled that Jones and the parent company of his Infowars website paid $965 million to numerous families of the 20 children and six staff members murdered in 2012 at Sandy Hook Elementary School in Newtown, Connecticut because they claimed they were actors faking the tragedy as part of a government conspiracy.

The ruling could increase significantly when a judge decides next month how much punitive damages to award. It also comes three months after a Texas jury awarded two of Sandy Hook’s parents $49.3 million in a similar case.

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Jones said he will appeal the appeal verdict and use the recent bankruptcy of his company, Free Speech Systems LLC, to avoid paying. It’s unclear if he and his companies will ever be able to pay the judgments in full, but plaintiffs’ attorneys have vowed to stop him from protecting his assets.

“We are confident that we will get as much of the judgment back as we can in the short term, and in the long term this judgment will come to nothing,” said Chris Mattei, an attorney for the plaintiffs.

Infowars’ finances aren’t public, but according to trial testimonies, the site brought in at least $165 million in revenue between 2016 and 2018. An economist in the Texas case estimated that Jones is personally worth between $135 million and $270 million.

Free Speech Systems filed for bankruptcy in July. The Sandy Hook families have intervened in the case, accusing Jones of siphoning off up to $62 million from Free Speech Systems while charging it with $54 million in “contrived” debt owed to another company that belonged to Jones and his parents.

Bankruptcy courts have wide discretion in deciding which creditors get paid first and are vigilant in cases where companies seek to siphon off funds over debt held by shell companies, said Minor Myers, a professor at the UConn School of Law .

“No bankruptcy judge would allow Alex Jones and his father to stand in line before the plaintiffs,” Myers said.

“BEAUTIFUL” BEHAVIOR

Infowars founder Alex Jones speaks to the media after appearing at his libel trial against Sandy Hook in Connecticut Superior Court in Waterbury, Connecticut, on October 4, 2022. REUTERS/Mike Segar/File Photo

Judgment lawsuits against bankrupt companies typically receive only a portion of their debts, along with other creditors whose debts are prioritized by the court.

However, in judgments of intentional harm, courts often rule that plaintiffs can continue to seek payment after the bankruptcy is complete by suing for wages and other assets, experts say.

Jones’ “underlying conduct was outrageous, and that’s the kind of thing that could take you beyond the bounds of bankruptcy,” Brian Kabateck, an attorney not involved in the case, told Reuters.

Asking a judge or appellate court to reduce the sentence on the grounds that it’s excessive is unlikely to prevail in the short term, according to several Connecticut attorneys.

Unlike some states, Connecticut doesn’t limit damages, and judges there rarely challenge jury verdicts because the legal standard for doing so is high, attorney Mike D’Amico said.

While the ruling is eye-catching, it includes more than a dozen plaintiffs who say they endured years of harassment, death threats and stalking at the hands of Jones’ supporters.

D’Amico said that given the uniquely tragic circumstances of the case and the outrageous nature of Jones’ conduct, a $1 billion judgment was appropriate.

“This was an unspeakable tragedy in terms of its implications and involves behavior that is just so despicable,” D’Amico said. “It’s the kind of award you would expect.”

Jones may also have hurt his chances by repeatedly violating court orders, claiming the trial was a sham and bursting into a tirade against “liberals” while testifying. Syracuse University College of Law professor Roy Gutterman said Jones’ “contempt for the system” is likely to undermine any legal remedy.

“It’s going to be a big request for the defendant to come back to court and say, ‘Now would you please reduce this to something more reasonable? said Gutterman.

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Reporting by Jack Queen in New York Additional reporting by Dietrich Knauth in New York Editing by Amy Stevens and Matthew Lewis

Our standards: The Thomson Reuters Trust Principles.

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