Free Speech, Alex Jones and Sandy Hook families to discuss plan terms

By Sarah Lizee

Olympia, Wash., June 15 – Free Speech Systems LLC, Alexander E. Jones and families of Sandy Hook shooting victims have reached a settlement that allows them to discuss Chapter 11 plan terms, according to U.S. Bankruptcy Court for the Southern District of Texas.

The Free Speech debtors have spent more than five years and millions of dollars in litigation over defamatory statements about school shootings. Between August and October of 2022, two separate juries awarded tort claimants that went to trial nearly $1.5 billion in damages.

However, some individuals who filed litigation against the debtors have yet to proceed to trial. As such, their claims remain unliquidated.

Free Speech said the settlement will delay the significant expense, disruption of operations and harm that would come from trials starting in the near term, and maximize efficiency in the Chapter 11 proceedings.

Through the motion, the debtors are seeking to settle the lift stay motion so that the settling plaintiffs will receive liquidated claims solely for bankruptcy purposes – including Chapter 11 plan and distribution purposes – in each of the debtors’ cases, which would provide substantially similar pro rata claims for all of the tort claimants.

If no consensual Chapter 11 plan settlement is reached among the tort claimants and the debtors by Aug. 31, then the automatic stay will lift to allow pre-trial proceedings.

And, if no settlement is reached by Oct. 20, then the automatic stay will lift, allowing state court actions to proceed to liquidate the claims of the settling plaintiffs.

Austin, Tex.-based Free Speech Systems, fully owned by Alex Jones, filed bankruptcy on July 29, 2022 under Chapter 11 case number 22-60043.

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