Alex Jones owes $1.5bn and declared bankruptcy. So how is Infowars still running?

<span>Photograph: Jim Bourg/Reuters</span>
Photograph: Jim Bourg/Reuters

At first glance, the disgraced far-right conspiracy theorist Alex Jones would appear to be finished. He’s been ordered in two judgments by a Connecticut court to pay nearly $1.5bn in damages to the families of victims of the 2012 Sandy Hook elementary school mass shooting, for the years he spent spreading lies about the incident on his show InfoWars – and making the families’ lives a “living hell”.

Infowars’ parent company, Free Speech Systems, declared bankruptcy in July, and Jones declared personal bankruptcy on 30 November, in a Texas court filing.

But the next day Jones was back on Infowars, seemingly unbothered by his potential financial annihilation as he chit-chatted with Kanye West in a gut-churning segment about how much the rapper “likes” Hitler.

If Alex Jones owes the Sandy Hook family over $1bn, how is he able to still broadcast? Why – for example – have his assets not been seized?

On the Infowars website, promotions run between programs that promise Jones won’t be silenced despite the judgment, with clips of Jones shouting that globalist elites want to shut him not because of Sandy Hook but because he exposes the truth. Jones also claims he has no money to hand over. In an Infowars segment in October, he claimed to be worth less than $2m and called the judgment against him “hilarious”. “Do these people really think they’re getting their money?” he questioned.

Related: Alex Jones files for bankruptcy after billion-dollar Sandy Hook court ruling

While nothing about declaring bankruptcy prevents Jones from going on TV, the declaration won’t get him off the hook from the court judgments – and could even backfire. Brian Davidoff, a bankruptcy attorney at Greenberg Glusker who is not advising Jones, said he was “befuddled” by Jones’ decision: “I’m not quite sure how it’s going to help him.”

In the short term, Jones is “obviously looking for the benefit of the automatic stay”, said Davidoff, referring to a powerful provision under US law that pauses any legal actions being taken against someone who files for bankruptcy (and, for now, means Jones can retain control of Infowars).

Typically, the stay is meant to give a debtor – some breathing room to develop a plan to reorganize their finances and pay their creditors. Under the rules of chapter 11 bankruptcy, the type that Jones filed, that plan must be approved by the creditors and bankruptcy court.

In his November filing, Jones listed as his creditors the families to whom he owes nearly $1.5bn, and American Express. He also estimated his own assets as worth between “$1m and $10m”. His hope, Davidoff said, might be to persuade a bankruptcy court to discharge most of his debts – essentially to use its authority to wave a magic wand and make them disappear.

But that’s extremely unlikely. In bankruptcy law, the penalties Jones faces for the intentional infliction of emotional distress are a type usually considered “non-dischargeable”. If the Sandy Hook families ask the court to establish this, they are likely to prevail, Davidoff said, as bankruptcy courts generally defer to existing judgments from other courts – in this case, the court that originally ordered the $1.5bn in penalties.

Jones’ bankruptcy filing will also expose him to potentially painful scrutiny, said Bradley McCormack, a Sader Law Firm bankruptcy attorney who is not advising Jones. Filing for chapter 11 bankruptcy requires Jones to turn over detailed financial information to the US Trustee’s Office, the federal office that oversees bankruptcy cases. In addition to disclosing the businesses he owns and how his money flows between them, Jones will have to report past and future monetary transactions. And he’ll have to let the US Trustee’s Office and Sandy Hook families question him about his finances under oath.

If Jones is found lying or hiding information in any these disclosures, he could be found guilty of a crime punishable by up to five years in prison.

“He’s about to be exposed for what he really is, or isn’t,” said McCormack. This intelligence will be extremely valuable for the families as they try to track down Jones’ assets and collect what they’re owed: “They’re going to see how things are set up. If nothing else, they’ll know where all his stuff is going to be.”

At a hearing in August, the forensic economist Bernard Pettingill testified that Jones and his media company, Free Speech Systems, have a combined net worth that could be as high as $270m.

Related: Only proper online regulation can stop poisonous conspiracists like Alex Jones | Simon Jenkins

That would include the five homes Jones owns in Texas, including a $3.5m Spanish-style estate that he transferred to his wife, Erika Wulff Jones, in February. It would also include Jones’s many companies, which the Sandy Hook families have accused him of using to hide his assets as his legal cases began to falter.

The families alleged in an August court filing that Jones has routed millions of dollars out of the accounts of Free Speech Systems – Infowars’ parent company – and into his own pockets through shell companies, while portraying them as debts.

The centerpiece of that plan, the filing said, is a $54m debt claimed by Free Speech Systems to PQPR Holdings, a Jones-owned health supplements company that has allegedly funneled money into another of Jones’ companies, AEJ Trust. “PQPR is a Jones family repository designed to shift assets and obligations as best suits their needs,” the filing said.

Bankruptcy laws may force Jones to come clean about these schemes. Even then, it’s difficult to imagine the bankruptcy court agreeing to a plan from Jones, making it likely his case will end up dismissed or that its protective stay will soon be lifted, Davidoff said. How long this takes “is a function of how quickly this court wants to work, but I would say it’s likely going to be a three- to nine-month process. I just don’t think it’s going to run into the years.”

Even if Jones could somehow convince the court to adopt a bankruptcy plan, such a plan might mean signing over nearly all of his future earnings to the plaintiffs, the lawyer said – a situation that could lead to the Sandy Hook families effectively owning Infowars. If this happens, they could shut the site down for good.

But in any event, Davidoff said, it’s unlikely that the families will get anywhere close to $1.5bn. “One of the unfortunate realities in litigation is that on one hand, you have the merits of the case. On the other hand, you have the economic realities. And it’s clear that Alex Jones’ business enterprises are essentially crumbling as a result of these claims, and their value is probably just a fraction of what they were.”