The Justice Department and attorneys for families of victims of the Sandy Hook school shooting are questioning the legitimacy of attempts by right-wing talk show host Alex Jones to put several businesses in his media empire into bankruptcy just as a trial was set to open in Texas, where he faced the possibility of being ordered to pay millions of dollars in damages.,,,

The Justice Department’s Office of the U.S. Trustee told Judge Christopher Lopez the structure of Jones’ filing “may demonstrate these cases are an abuse of the bankruptcy system.” The government submission questioned why Jones had not filed for personal bankruptcy and why another business he controls, Free Speech Systems, was not included in the filings earlier this week.

“Why didn’t Alex Jones or FSS file for bankruptcy relief when Debtors did? They are both defendants in the same litigation as Debtors, and all of them have been found liable in those cases,” attorneys Jayson Ruff and Ha Nguyen wrote for the Justice Department unit. “It appears that Jones intends to leverage the bankruptcy filings of his holding companies to extend the automatic stays of pending litigation against Debtors to him and FSS, while he maintains full control of FSS and its assets going forward. Thus, this Motion … seems to be just the first step for Debtors to carry out Jones’s and FSS’s scheme of avoiding the burdens of bankruptcy while reaping its benefits.”

Lawyers for the Sandy Hook families made similar arguments that Jones is making an “illegitimate” attempt to dodge or delay the financial consequences of his false claims about the 2012 attack.

“What Jones and his affiliates want to avoid is the wisdom of juries that would have liquidated his liability and the liability of his affiliates,” the families’ attorneys wrote.

Why didn’t Alex Jones or FSS file for bankruptcy relief when Debtors did? They are both defendants in the same litigation as Debtors, and all of them have been found liable in those cases—in unliquidated amounts. Moreover, Debtors’ assets are estimated to be virtually nil for a case of this significance ($50,000), while Alex Jones and FSS are fully funding the administrative expenses of these bankruptcy cases without filing themselves. Why? It appears that Jones intends to leverage the bankruptcy filings of his holding companies to extend the automatic stays of pending litigation against Debtors to him and FSS, while he maintains full control of FSS and its assets going forward. Thus, this Motion to appoint the trustees for the Litigation Settlement Trust seems to be just the first step for Debtors to carry out Jones’s and FSS’s scheme of avoiding the burdens of bankruptcy while reaping its benefits.

“We’re turning to the bankruptcy courts to compel the plaintiffs to estimate the value of their claims in open court by discernible evidentiary standards,” Alex Jones’s lawyer Norman Pattis told the Wall Street Journal on Wednesday. “The plaintiffs have turned this litigation into a macabre morality play and have refused to negotiate in good faith. We hope they will show respect to the federal courts.”

Admitting that your client is placing three worthless companies into a sham bankruptcy for the express purpose of stopping a jury from assessing damages is a weird flex. But why should anything about this freak show be normal, right?....

But then the attorneys for the Texas and Connecticut plaintiffs got up to argue that the bankruptcy shouldn’t be allowed to go forward at all, since it was clearly a ploy to escape liquidated damages in Connecticut, where a jury trial was due to take place later this year, and Texas, where trial was set for this coming Monday. And furthermore, three companies with no assets which appear to conduct no business at all are not appropriate vehicles for subchapter V bankruptcy under 11 U.S.C. § 101(51C), they insisted.

At which point Kyung Shik Lee, attorney for the supposedly bankrupt Jones entities, got up and ranted indignantly at the Sandy Hook plaintiffs that this was the first offer of money that they’d seen in ten years, and he’d heard nothing but complaints about his generous offer to pin their arms behind their backs and deny them their day in court.

The plaintiffs only filed their cases in 2018. Lest we forget, what happened ten years ago is that a gunman opened fire at an elementary school, killing 26 people. After which Mr. Lee’s client spent a year telling his deranged audience that the plaintiffs were simply pretending their children had been murdered, subjecting them to vicious harassment and death threats that forced at least one of them to go into hiding for his own safety.

Nevertheless, Lee insisted that “bankruptcy code and courts are the appropriate vehicle” for resolving “a sad and complex situation” which was actually on the eve of being decided by a jury. In fact, he continued, the Sandy Hook plaintiffs should thank Jones for his “good faith effort here to do something constructive with the bankruptcy process,” since otherwise the Texas plaintiffs might get all the money by dint of getting to the courthouse first. There are “limited funds and we’re trying to maximize it so it goes to the plaintiffs” he huffed, seeming hurt and offended that someone might suggest he had anything but the purest motives.