{"id":30981,"date":"2022-04-21T22:23:02","date_gmt":"2022-04-21T22:23:02","guid":{"rendered":"https:\/\/cjstudents.com\/?p=30981"},"modified":"2022-04-21T22:23:02","modified_gmt":"2022-04-21T22:23:02","slug":"infowars-bankruptcy-may-be-abuse-of-court-system-justice-department-says","status":"publish","type":"post","link":"https:\/\/cjstudents.com\/index.php\/2022\/04\/21\/infowars-bankruptcy-may-be-abuse-of-court-system-justice-department-says\/","title":{"rendered":"Infowars Bankruptcy May Be Abuse of Court System, Justice Department Says"},"content":{"rendered":"<p> [ad_1]<\/p>\n<div>\n<p>(Bloomberg) &#8212; An arm of the U.S. Justice Department cast doubt on far-right radio host Alex Jones\u2019s use of bankruptcy as three companies he once owned prepare for their first day in court Friday.<\/p>\n<p>Most Read from Bloomberg<\/p>\n<p>The DOJ\u2019s bankruptcy watchdog, known as the U.S. Trustee, said the companies\u2019 Chapter 11 filing \u201craises numerous questions \u2014 the answers to which may demonstrate these cases are an abuse of the bankruptcy system,\u201d according to court papers filed Thursday. The U.S. Trustee urged a federal judge in Texas to reject a request to appoint former judges to oversee a proposed victim compensation fund.<\/p>\n<p>Three small entities Jones once owned are seeking to use bankruptcy to set up a trust to pay damages that may be won in court by relatives of children killed in the 2012 Sandy Hook massacre. The relatives of Sandy Hook victims won key court rulings in Connecticut and Texas against Jones after he called the shootings a hoax, and future trials will determine the size of the damages.<\/p>\n<p>\u201cThis Motion to appoint the trustees for the Litigation Settlement Trust seems to be just the first step for Debtors to carry out Jones\u2019s and FSS\u2019s scheme of avoiding the burdens of bankruptcy while reaping its benefits,\u201d the U.S. Trustee added in court papers.<\/p>\n<p>Settlement Trust<\/p>\n<p>The three units, including one that holds the rights to website Infowars, sought court protection in Victoria, Texas on Sunday. Chapter 11 filings allow a business to keep operating while working on a turnaround plan and pause pending civil litigation. Jones\u2019 main holding company, Free Speech Systems LLC, didn\u2019t file for bankruptcy.<\/p>\n<p>In the Infowars bankruptcy, lawyers set up a trust that would pay people suing the companies, and Jones handed over his equity in the entities to the trust. The units in bankruptcy \u201chave no purpose other than to hold assets which may be used by other entities\u201d and their only liabilities are the litigation claims, according to court papers.<\/p>\n<p><button class=\"link caas-button collapse-button\" aria-label=\"\" title=\"\" data-ylk=\"elm:readmore;slk:Story continues\">Story continues<\/button><\/p>\n<p>By establishing a trust to settle legal claims in bankruptcy, Jones\u2019s companies are following a controversial playbook used by other corporations facing significant lawsuits. Companies including opioid maker Purdue Pharma LP and youth organization Boy Scouts of America have sought Chapter 11 protection to settle thousands of cases and streamline payouts to victims claiming harm.<\/p>\n<p>Jones put $725,000 of his own money into the trust to cover the costs of the Chapter 11 filings. Additional funds, including $2 million cash, could flow into the trust as a result of the bankruptcy, according to court papers.<\/p>\n<p>Should a judge approve the trusts, two former bankruptcy judges &#8212; Russell F. Nelms and Richard S. Schmidt &#8212; are overseeing the fund. The U.S. Trustee argues that it\u2019s too early in the case to appoint Nelms and Schmidt or to approve the trust.<\/p>\n<p>Lawyers representing Jones and his businesses have said the Texas defamation lawsuit was strategically filed to silence their free speech on matters of public interest. They did not immediately return a call for comment about the U.S. Trustee\u2019s filing.<\/p>\n<p>Judges in Connecticut and Texas issued default judgments against Jones after he failed to turn over documents including financial information. Lawyers representing Jones have argued the plaintiffs\u2019 probe into the financial ties between Jones and his various entities is akin to a \u201ccollections action\u201d and a \u201cfishing expedition.\u201d<\/p>\n<p>The main case is InfoW LLC, 22-60020, U.S. Bankruptcy Court, Southern District of Texas.<\/p>\n<p>Most Read from Bloomberg Businessweek<\/p>\n<p>\u00a92022 Bloomberg L.P.<\/p>\n<\/div>\n<p>[ad_2]<br \/>\n<br \/><a href=\"https:\/\/finance.yahoo.com\/news\/infowars-bankruptcy-may-abuse-court-213026906.html\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>[ad_1] (Bloomberg) &#8212; An arm of the U.S. Justice Department cast doubt on far-right radio&#8230;<\/p>\n","protected":false},"author":1,"featured_media":30982,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":["post-30981","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-cj-system"],"_links":{"self":[{"href":"https:\/\/cjstudents.com\/index.php\/wp-json\/wp\/v2\/posts\/30981","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cjstudents.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cjstudents.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cjstudents.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cjstudents.com\/index.php\/wp-json\/wp\/v2\/comments?post=30981"}],"version-history":[{"count":1,"href":"https:\/\/cjstudents.com\/index.php\/wp-json\/wp\/v2\/posts\/30981\/revisions"}],"predecessor-version":[{"id":30983,"href":"https:\/\/cjstudents.com\/index.php\/wp-json\/wp\/v2\/posts\/30981\/revisions\/30983"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cjstudents.com\/index.php\/wp-json\/wp\/v2\/media\/30982"}],"wp:attachment":[{"href":"https:\/\/cjstudents.com\/index.php\/wp-json\/wp\/v2\/media?parent=30981"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cjstudents.com\/index.php\/wp-json\/wp\/v2\/categories?post=30981"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cjstudents.com\/index.php\/wp-json\/wp\/v2\/tags?post=30981"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}