Sandy Hook denier Alex Jones eyes late March bankruptcy exit

By Dietrich Knauth

NEW YORK (Reuters) – Sandy Hook conspiracy theorist Alex Jones could exit Chapter 11 bankruptcy by late March or early April, his lawyer said on Wednesday after a judge decided families whom he owes $1.5 billion for lying about the 2012 school shooting can vote on competing plans to resolve their claims.

U.S. Bankruptcy Judge Christopher Lopez in Houston allowed Jones to solicit votes on a proposal that would pay at least $55 million to the relatives of 20 students and six staff members killed in the 2012 mass shooting at Sandy Hook Elementary School in Newtown, Connecticut.

Jones, who hosts a radio show, claimed for years that the massacre was a hoax, staged with actors as part of a government plot to seize Americans’ guns.

He has since acknowledged the shooting occurred, but the families, who said Jones cashed in for years off his lies, sued him for defamation. Courts in Connecticut and Texas have ruled that Jones intentionally defamed them and have ordered Jones to pay $1.5 billion in damages.

Lopez on Wednesday also allowed the family members, whose defamation judgments make them the main creditors in Jones’ bankruptcy, to solicit votes on their own plan, which would liquidate Jones’ assets and pursue litigation against his associates.

The families previously estimated that they would receive at least $85 million from Jones under their plan.

Lopez said at a court hearing that both proposals contained enough information for creditors to make an informed vote. Lopez set a Feb. 12 deadline for votes.

Jones will attempt to reach a compromise with the Sandy Hook families before either plan is submitted for final court approval, his attorney Vickie Driver told Lopez at the hearing.

“Now that we’ve got some plans in place, that people can evaluate what it really looks like to go left or right. We have a chance at one more run at settlement,” Driver said.

Jones previously engaged in bankruptcy mediation with the families, but failed to reach a settlement.

Jones expects to ask the court to approve his bankruptcy plan in late March or early April, after votes are collected and settlement talks have resumed, Driver said.

The Sandy Hook families’ legal judgments account for nearly all of Jones’ debts, according to court filings. Lopez previously ruled that at least $1.1 billion of their legal judgments cannot be legally discharged by Jones’ bankruptcy.

Bankruptcy can be used to wipe out debts and legal judgments but not if they result from “willful or malicious injury” caused by the debtor, Lopez said in an October ruling.

Jones and his media company, Free Speech Systems, filed for bankruptcy protection in December and July last year, respectively.

(Reporting by Dietrich Knauth, Editing by Alexia Garamfalvi and Cynthia Osterman)