An auction company executive involved in the liquidation of conspiracy theory platform Infowars testified for nearly five hours Monday, as a bankruptcy judge in Texas began a hearing into whether The Onion satirical news outlet was properly named over a company affiliated with Jones.
Jeff Tanenbaum, president of ThreeSixty Asset Advisors, was grilled by lawyers for Jones and the company in a Houston courtroom over how The Onion鈥檚 bid came to be valued at $7 million and why a live auction was not held. He defended both the value of the bid and its selection after the two sealed offers were opened.
U.S. Bankruptcy Judge Christopher Lopez continued the hearing to Tuesday afternoon, when the trustee overseeing the sale of Jones鈥� assets is expected to take the stand. Lopez could ultimately decide whether to void The Onion鈥檚 bid, name the Jones-affiliated company the winner or hold another auction, among other possibilities.
Jones and First United American Companies, which runs a website in Jones鈥� name that sells nutritional supplements and submitted the other bid, are that concluded on Nov. 14. The trustee and The Onion deny the allegations, accusing Jones and the company of sour grapes.
The sale of Infowars is part of , which he filed in late 2022 after he was ordered to pay in defamation lawsuits in sa国际传媒icut and Texas filed by relatives of victims of the Sandy Hook Elementary School shooting in sa国际传媒icut. Jones repeatedly called the 2012 shooting that killed 20 children and six educators a hoax staged by actors and aimed at increasing gun control.
Most of the proceeds from the sale of Infowars, as well as many of Jones鈥� personal assets, will go to the Sandy Hook families to help satisfy judgments issued by juries and judges in state courts in sa国际传媒icut and Texas. Some proceeds will go to Jones鈥� other creditors.
The Onion, which wants to turn Infowars鈥� website and social media accounts into , offered $1.75 million for Infowars鈥� assets in the auction, while First United American Companies bid $3.5 million.
But The Onion鈥檚 bid also included a pledge by many of the Sandy Hook families to forgo some or all of the auction proceeds due to them to give other creditors a total of $100,000 more than they would receive under other bids.
The trustee, Christopher Murray, chose The Onion, saying its proposal was better for creditors because they would receive more money. The Onion valued the bid, with the Sandy Hook families鈥� offer, at $7 million, because that amount was equal to a purchase price that would provide the same amount of money to the other creditors.
Tanenbaum testified that he agreed with the $7 million valuation and believed The Onion鈥檚 bid conformed to the auction rules.
A lawyer for Jones, Ben Broocks, asked Tanenbaum how it was possible that the Sandy Hook families鈥� offer boosted The Onion鈥檚 offer to such a high amount.
鈥淚t means the purchase price value has gone up because another purchase price would have to be higher than that value in order to provide the same net benefit to that group of creditors,鈥� Tanenbaum said.
During his opening argument, Broocks said there was no way The Onion should have been chosen over First United American.
鈥淗ow does a $1.75 million bid beat a $3.5 million bid?鈥� he asked. 鈥淗ow is that $1.75 million greater? Well, it鈥檚 voodoo economics to use a phrase.鈥�
Broocks and a lawyer for First United American, Walter Cicack, also questioned why a live bidding round wasn鈥檛 held after the sealed offers weren鈥檛 submitted, as they said they expected, but the judge鈥檚 order made live bidding optional.
Jones has been criticizing the sale process on his show and social media sites, calling it 鈥渞igged鈥� and a 鈥渇raud.鈥�
Joshua Wolfshohl, an attorney for Murray, told the judge Monday that no wrongdoing occurred during the auction. He called the complaints by Jones and First United American Companies unfounded.
鈥淭he vast majority of their complaints are just fantastic, imagined conspiracy theories that have no basis in reality,鈥� he said.
Murray, The Onion and the Sandy families deny allegations of wrongdoing. In his own court filing, Murray called the allegations 鈥渁 disappointed bidder鈥檚 improper attempt to influence an otherwise fair and open auction process.鈥�
Up for sale at the auction were all the equipment and other assets in the Infowars studio in Austin, Texas, as well as its social media accounts, websites, video archive and product trademarks. Jones uses the studio to broadcast his far-right, conspiracy theory-filled shows on the Infowars website, his account on the social platform X and radio stations.
Jones has set up another studio, websites and social media accounts in case The Onion wins approval to buy Infowars and kicks him out. Jones has said he could continue using the Infowars platforms if the auction winner is friendly to him.
Jones is appealing the $1.5 billion in judgments citing free speech rights but has acknowledged that .
On Friday, a sa国际传媒icut appeals court reduced by $150 million the original $1.44 billion judgment against Jones in the lawsuit against him in that state, but Jones鈥� lawyer said he will ask sa国际传媒icut鈥檚 highest court to review the appellate ruling. Jones is also appealing a $50 million judgment in a similar Texas defamation lawsuit.
Dave Collins, The Associated Press
