Bankruptcy judge rejects The Onion's bid to buy Alex Jones' Infowars

A bankruptcy judge on Tuesday rejected a bid by The Onion’s parent company to buy Alex Jones’ far-right media empire, including the website Infowars, ruling that the auction process was unfair. 

U.S. Bankruptcy Judge Christopher Lopez said after a two-day hearing that The Onion’s parent company, Global Tetrahedron, had not submitted the best bid and was wrongly named the winner of an auction last month by a court-appointed trustee. 

“I don’t think it’s enough money,” Lopez said in a late-night ruling from the bench in a Houston court. “I’m going to not approve the sale.”

It was not immediately clear whether there would be a new auction in which The Onion could bid again for Jones’ assets. Lopez said he would leave the decision about what to do next in the hands of the trustee, Christopher Murray, who had overseen the auction.

The judge said Murray had acted in good faith in running the auction in which The Onion’s parent company initially appeared to prevail, but he said the trustee did not run a transparent process and should have given a rival bidder associated with Jones another chance to improve its bid.

“I think you’ve got to go out and try to get every dollar,” Lopez said. “I think that the process fell down.” 

The ruling dashed, at least for now, Global Tetrahedron’s plans to take over Infowars and radically shift its content from anti-government conspiracy theories to satirical humor. Instead, Jones can continue operating his far-right media business as he has for decades.

Jones went live from a studio soon after the ruling and told viewers: “We can celebrate the judge doing the right thing.” He had previously referred to the sale process as “auction fraud” and a “fraudulent sale.” 

Onion CEO Ben Collins said in a statement on X that the company was "deeply disappointed" but would “continue to seek a path towards purchasing InfoWars in the coming weeks.”

“It is part of our larger mission to make a better, funnier internet, regardless of the outcome of this case,” he said.

“We appreciate that the court repeatedly recognized The Onion acted in good faith, but are disappointed that everyone was sent back to the drawing board with no winner, and no clear path forward for any bidder," Collins continued. 

Collins previously covered disinformation and conspiracy theories for NBC News, a beat that often meant covering Jones.

The Onion’s parent company had partnered in its bid with families of the victims of the 2012 Sandy Hook school shooting who successfully sued Jones for defamation, winning court judgments now valued at $1.2 billion. Part of the company’s plan for Infowars was to make anti-violence organization Everytown for Gun Safety the exclusive advertiser. 

Chris Mattei, an attorney for the Connecticut families, said they were also disappointed.

“These families, who have already persevered through countless delays and roadblocks, remain resilient and determined as ever to hold Alex Jones and his corrupt businesses accountable for the harm he has caused,” he said in a statement. 

“This decision doesn’t change the fact that, soon, Alex Jones will begin to pay his debt to these families and he will continue doing so for as long as it takes," Mattei said.

Last month’s announcement that Global Tetrahedron had been named the winner of the auction shocked the media world and fans of both Jones and The Onion, but that announcement was only a recommendation from the trustee and required approval from Lopez, who is overseeing Jones’ bankruptcy case. 

The Global Tetrahedron bid consisted of two components: $1.75 million in cash and a noncash pledge by some of the bankruptcy case creditors — families of the Sandy Hook shooting — to forgo the proceeds they would typically receive from the sale. Some of the families partnered with The Onion in its bid.

Murray said he valued the bid at $7 million in all.

A rival bidder associated with Jones, First United American Cos., offered $3.5 million in cash, or twice as much cash as The Onion’s parent company. First United American is a limited liability company affiliated with Jones’ dietary supplements business, and its bid had Jones’ blessing. 

In court Tuesday, Walter Cicack, a lawyer for First United American, alleged that the second component of the Global Tetrahedron bid consisted of “amorphous, non-cash currency.” He said his client’s all-cash offer should have won.

“Cash is cash!” he said in court. 

Lopez said a different process could have earned more money for creditors including the Sandy Hook families.

“I don’t even think the $3.5 million is enough,” he said. 

At stake is control of many assets from Jones’ company, Free Speech Systems, including the intellectual property associated with Infowars.com, production equipment such as computers and studio lights, and inventory from Jones’ nutritional supplements business. 

Jones’ assets are being sold off in bankruptcy because he owes $1.2 billion to the families of the victims of the Sandy Hook shooting. Jones falsely and repeatedly told his audience that the shooting was a hoax, and the families successfully sued him for defamation and other claims. 

In testimony before the bankruptcy court in Houston, Murray defended the auction process he used. He said his only goal was to maximize the payout going to the unsecured creditors of Jones’ company. 

“I’ve conducted an open process. I haven’t excluded anyone from participating,” he said. Asked by a lawyer if he had a bias as to who should win the auction, he responded, “No, no bias.” 

The auction process consisted of a solicitation for sealed, written bids. Murray initially considered a live auction but decided against it. He testified that after he determined Global Tetrahedron’s bid to be higher, he worked with the company and its lawyers to iron out details about the creditors waiving their share of the proceeds.

Lopez said in his ruling that he was not bothered by the waiver provision on its own, but he said the other bidder should have been told about it. He also said he was bothered by the ironing-out process afterward, in which he said Murray went through “mental gymnastics.” 

“It didn’t even feel like they understood what they understood, speaking of the trustee and the auctioneer,” he said. 

Jason Goldstein, a lawyer for The Onion’s parent company, said in court that the delay after the conclusion of the auction had been costly. 

“My clients have faced this delay with significant additional cost,” he said before the ruling. “They’re still stuck here today without resolution and clarity.”

This story first appeared on NBCNews.com. More from NBC News:

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