Bankruptcy judge approves higher payments for InfoWars provider

Infowars’ Alex Jones speaks to the media during a visit to US Senate Dirksen as Twitter CEO Jack Dorsey testifies before a Senate Intelligence Committee hearing on Capitol Hill in Washington, USA, September 5, 2018. REUTERS/Jim Bourg

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  • Sandy Hook families objected to payments
  • Shipping provider Blue Ascension was trained by former Free Speech Systems employees
  • Blue Ascension owner received $400,000 payout from Alex Jones this week

(Reuters) – The parent company of far-right website InfoWars received clearance from a U.S. bankruptcy judge on Friday to make higher-than-expected payments to a supplier that ships dietary supplements and other InfoWars-branded products to its customers.

US bankruptcy judge Christopher Lopez in Houston has approved a request by Free Speech Systems LLC, owned by conspiracy theorist Alex Jones, to pay its shipping and fulfillment provider a flat fee of $20 per order, exceeding the cap it had set on such payments in August. 3, although he said he was concerned about the “unique relationship” between the companies.

FSS had told the court it needed more flexibility to make higher shipping payments due to an “increase” in demand for its dietary supplements and other products.

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FSS filed for bankruptcy on July 29, amid a lawsuit to determine how much it and Jones should pay for making false and defamatory claims that the 2012 Sandy Hook Elementary School massacre was a hoax. A Texas jury later awarded nearly $50 million in compensatory and punitive damages to the parents of slain 6-year-old Jesse Lewis.

The Sandy Hook families, who sued Jones and FSS in Connecticut and Texas and argued the bankruptcy was an effort to avoid paying libel verdicts, opposed the request.

Ryan Chapple, an attorney for the Connecticut families, said it set off “a lot of alarm bells” about Jones and FSS embezzling money from FSS to avoid paying bankruptcy creditors.

Lopez said he shared many of the concerns raised by the Sandy Hook families, noting that shipping provider Blue Ascension was formed by former FSS employees and took over shipping and fulfillment services. of FSS on the eve of FSS’s bankruptcy filing.

The “unique” relationship between the two companies and their owners “deserves further consideration,” Lopez said, but he approved increased payments for the next 13 days.

“The more people who want to buy the product, the more money there is available to pay creditors,” Lopez said. “It’s a good thing for the field.”

The Sandy Hook families argued in court that Jones orchestrated the outsourcing of FSS’s once-internal shipping services to a close friend and sometimes personal trainer, Patrick Riley, who performed various duties for Jones and who did not had no other shipping and fulfillment experience. . Riley testified that he spoke to Jones about hiring FSS employees for his new venture and said Jones wrote him a check for $400,000 this week to expedite the delivery of InfoWars products by Blue Ascension.

Marc Schwartz, director of restructuring at InfoWars, said Blue Ascension is not affiliated with Jones and is the only company capable of providing InfoWars products to customers.

The case is Free Speech Systems LLC, US Bankruptcy Court for the Southern District of Texas, No. 22-60043.

For FSS: Ray Battaglia of the law firms of Ray Battaglia and RJ Shannon of Shannon & Lee

For the Sandy Hook Families: Ryan Chapple of Cain & Skarnulis and Marty Brimmage of Akin Gump Strauss Hauer & Feld

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