Alex Jones’ Free Speech Systems files Chapter 11 bankruptcy in Texas

By Sarah Lizee

Olympia, Wash., Aug. 1 – Free Speech Systems LLC, which is fully owned by Alex Jones, filed Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas, according to court documents.

“The debtors’ financial distress stems from statements made by Alex Jones and other employees of [Free Speech Systems] in the wake of the Dec. 14, 2012, mass shooting at Sandy Hook Elementary School in which 20 children and six educators were killed by Adam Lanza,” the chief restructuring officer of the company, W. Marc Schwartz, said in court documents filed Friday.

“Certain parents of the deceased victims of the Sandy Hook shooting assert, among other things, that these statements were defamatory and inflicted emotional distress.”

In 2018, lawsuits were filed against Jones, Infowars and Free Speech Systems in Texas and Connecticut state courts. As a result of Friday’s bankruptcy filing, the state court litigation had been stayed. But on Monday, the bankruptcy court modified the automatic stay to allow the litigation to continue to final judgment.

The CRO said the debtors have spent more than $15 million in legal fees and costs since the litigation started.

Both the Texas and Connecticut courts have imposed multiple sanctions and ruled that Jones and Free Speech Systems have failed to comply with discovery requirements. As such, the judgment on defamation liability has been entered against them by default.

Free Speech Systems is seeking court approval to use the cash collateral of PQPR Holdings Ltd., LLC, an affiliated entity that supplies dietary supplements sold through Inforwars.com. Free Speech Systems currently owns $53.66 million in principal and $11.79 million in interest under a secured note with PQPR.

Infowars’ April filing

In April, Infowars filed bankruptcy and lined up a plan support agreement to fund $10 million to pay litigation claimants. However, the litigation plaintiffs sought to dismiss the case, and the court dismissed with prejudice the case of Infowars and other debtors, including Free Speech Systems, within two months of the petition date.

The CRO said the main goal of the Infowars bankruptcy case was to engage the plaintiffs in a global settlement.

Other details

Free Speech Systems listed total assets of $14.33 million and total liabilities of $79.16 million.

No unsecured creditors were listed with claims of $1 million or more.

The company is represented by Ray Battaglia, PLLC and Shannon & Lee LLP.

Austin, Tex.-based Free Speech Systems filed bankruptcy under Chapter 11 case number is 22-60043.

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