As Connecticut jury deliberates damages for second group of Sandy Hook parents branded crisis actors by right-wing podcaster Alex Jones after their children were murdered in 2012 school shooting , the bankruptcy of his company in Texas seems to have disappeared. tracks. Still.
For context, Jones has tried every means not to confront the Sandy Hook plaintiffs in court. Along the way, his persistent refusal to cooperate with discovery landed him default judgments in Connecticut and Texas, at which point his company Free Speech Systems (FSS) suddenly “remembered” that it owed 55 million to his supplement supply company PQPR, which is wholly owned by Alex Jones and his parents. FSS then executed promissory notes, securitizing the “debts”, prioritizing PQPR as the “creditor” and allowing FSS to begin shoveling mountains of cash out the door and off its books.
On the eve of the first trial in Connecticut, Jones bankrupted three worthless shell companies. Because they were named defendants in the tort suits, this had the short-term effect of suspending state business. Jones offered to fund a $10 million trust if the two dozen plaintiffs dropped all of their claims. But plaintiffs did not sue the LLCs, and the US trustee accused Jones of filing forged bankruptcy. Ultimately, the attorney representing the LLCs, Kyung Shik Lee, and proposed relocation agent, Marc Schwartz, withdrew from court, outraged by the suggestion that they had abused the bankruptcy process for judicial.
But they weren’t gone for long. Almost as soon as the Texas case began, they were back to representing FSS in its own bankruptcy case. Early in the proceedings, U.S. Bankruptcy Judge Christopher Lopez flagged the potential conflict posed by Lee and Schwartz representing LLCs and FSSs — chronologically overlapping representation, though the two were somewhat… less than clear about the question. Meanwhile, plaintiffs in Texas and Connecticut and the U.S. trustee were crying bloody murder that the lawyer and accountant were in cahoots with Jones to loot FSS assets, not only because they had approved the specious notes of the PQPR, but also because they used the FSS. money to pay Jones’ travel expenses and legal fees for the Connecticut trial in which he and FSS are co-defendants.
The case came to a head in a six-hour hearing on September 20, during which Judge Lopez ordered the US bankruptcy trustee to investigate FSS’s books, specifically the PQPR notes. He also disqualified Lee and Schwartz, while saying he hoped he never had to do anything like that again during his court term. Famous Last Words!
On October 4, Schwartz and Lee, along with Lee’s partner, RJ Shannon, dropped off a mate reconsideration motions in an effort to prove that they are not biased in favor of Jones or PQPR. And the way they intend to prove their disinterestedness is to burn Jones to the ground and release a bunch of attorney work products on the public record.
To defend the $80,000 expense for travel expenses of Jones, Lee and Shannon Argue that jones threatened by tank FSS’s earnings for October by staying in Connecticut and refusing to do his show for the entire trial if FSS didn’t crack. In the end, Jones agreed to attend just three days of the trial, guaranteeing that FSS would be able to sell the $40,000 worth of product he carries every day he is on the air.
Lee makes similar allegations about Jones playing hardball to get FSS to pay the full bill for attorney Norm Pattis, who is representing both Jones and FSS in the Connecticut case. With Jones threatening to revoke his consent to joint representation, forcing FSS to find a new attorney on the eve of trial, Lee says he had no choice but to hand over the money.
Finally, Lee and Shannon accuse Pattis of giving them bad legal advice about sending the case to Connecticut through bankruptcy court, citing an email exchange in which Shannon rebuffed Jones’ attempt to get him to fight. I re-send.
“I don’t think the debtor would have withdrawn if we had had a clear view of the situation. Norm misunderstood when he reported to us that the state court was conducting jury selection for the claims against the debtor,” he said. wrote August 16. “What the state court has really done is divide the trial so that it only proceeds with respect to Alex Jones and not the debtor.”
“[FSS] must focus on things that will preserve and increase the value of his estate and not fall into the trap that claimants find themselves in of fighting everything for the sake of fighting,” he later added.
Good! Alex Jones hasn’t been so apoplectic since finding out the government was making those fucking frogs gay. After washing away the appeasement barbecue sauce out of his chest hairhe and his new attorney have filed a objection to the reconsideration motions of Schwartz and Lee.
Claiming to be the true representatives of FSS, Jones accuses the former company representatives of “publishing the privileged communications to further their self-serving suggestion of a narrative on behalf of Movants, contrary to and not supported by the common interest parties or the communication, in an effort to seemingly disclose the substantive debate between these common interests.
Although he concedes in a footnote that it’s “unclear” whether Lee and Schwartz ever signed the mutual interest agreement that would put them in touch with a tort attorney.
Indeed, Jones declares himself shocked to “ad hominem both personal and professional attacks” occasioned by the U.S. trustee’s objection to the employment of Shwartz and Lee, as well as “their dishonest and unethical motives in filing the same (filed without even showing, and much less consult, Alex Jones or Debtor’s Co-Lawyer regarding the inflammatory and incorrect nature of this response).
Swing for the fences, kids!
In response, Shannon and Lee Argue this they or they are the true representatives of FSS, not Jones. That FSS and Jones are separate entities with separate counsel. And that in the absence of their approval, there was no legal relationship between the parties.
And tomorrow, the parties are due back in court at 10 a.m. for a motion to consider Jones’ preferred nominee for Chief Restructuring Officer, who is expected to be absolutely zero.
Good luck, Judge Lopez!
FSS bankruptcy file [via Court Listener]
Dye Liz lives in Baltimore where she writes on law and politics.