By Maria Chutchian
(Reuters) - Three entities linked to conspiracy theorist Alex Jones’ InfoWars on Thursday agreed to dismiss their Chapter 11 case, marking a win for the families of the Sandy Hook Elementary School massacre victims.
The families had claimed the bankruptcy was a "sinister" attempt by Jones to shield his assets from liability stemming from defamation lawsuits they had won against him.
The three holding companies for Jones’ far-right website InfoWars and other products he controls agreed to toss the Chapter 11 case following allegations that the bankruptcy was filed only as a litigation tactic in the Sandy Hook defamation cases. A lawyer for the three companies has denied those allegations.
The bankruptcy was filed in April in the wake of court judgments that found Jones and his media businesses liable in multiple defamation lawsuits after he falsely claimed that the 2012 shooting in Newtown, Connecticut, that left 20 children and six school employees dead was a hoax.
The families, who had previously rebuffed Jones’ efforts to settle the cases, and the U.S. Department of Justice’s bankruptcy watchdog, the U.S. Trustee, argued the Chapter 11 case was filed only to protect Jones’ personal wealth ahead of trials to determine how much he owes in damages for the defamation judgments.
A lawyer for the families said in April that the bankruptcy was filed for "a sinister or unworthy purpose."
The families recently dropped the three bankrupt entities as defendants in the defamation lawsuits, which effectively severed any connection between the families and the bankruptcy, allowing them to resume their cases against Jones, who did not file for bankruptcy himself.
The U.S. Trustee, however, continued to seek dismissal of the bankruptcy, which a lawyer for the three entities agreed to on Thursday.
“The facts are that these Chapter 11 cases were filed in good faith and would still serve a valid bankruptcy purpose. Nonetheless, the Debtors ... recognize that the dismissal is in the best interests of the Debtors and their estates,” a lawyer for the Jones entities, Kyung Lee, said in Thursday’s filing.
A lawyer for Jones did not immediately respond to a request for comment.
(Reporting by Maria Chutchian in New York; Editing by Alexia Garamfalvi and Matthew Lewis)