Conspiracy theorist Alex Jones, the founder of InfoWars, has filed a motion to convert his Chapter 11 bankruptcy case to a Chapter 7 liquidation.

In addition to Jones’ personal case, his InfoWars subsidiary, Free Speech Systems (FSS), is also involved in its own Chapter 11 case. FSS filed for bankruptcy in August 2022 amid trials to determine Jones’ liability for defamation claims brought by the families of the victims of the Sandy Hook Elementary School shooting. The families accused Jones of defamation due to his repeated false claims that the shooting was a hoax.

In October 2022, Judge Christopher Lopez of the US Bankruptcy Court for the Southern District of Texas approved FSS’ motion to enter mediation with Jones, the Sandy Hook families and PQPR Holdings Limited, another Jones-controlled entity. Jones then personally filed for Chapter 11 in December 2022. Recently, in FSS’ case, Judge Lopez terminated mediation and set a hearing on plan confirmation and PQPR’s motion to convert the case for 14 June.

Judge Lopez said there are several paths FSS’ cases can take: a plan gets confirmed and the court continues with adversary proceedings and other matters under Subchapter V, the case gets converted to Chapter 7 under PQPR’s motion, or the case gets dismissed.

Jones notes in his motion that he owns 100% of the outstanding membership interests in FSS. Jones said in Chapter 11 he has been liquidating his non-exempt assets for the benefit of creditors. On 15 December 2023, he filed his reorganization plan and the unsecured creditors committee filed a competing creditors’ plan. The court conditionally approved the disclosure statements for both plans and set various deadlines for the plans on 25 January. The parties have not been able to reach a resolution that could be incorporated into the terms of a plan of reorganization.

On 2 June, certain creditors of Jones and FSS – Connecticut plaintiffs who are involved in litigation over the Sandy Hook shooting – filed a motion to convert the FSS case to Chapter 7. At a recent hearing, the court signaled its intention to dismiss the FSS case if a plan was not confirmed by 14 June. With the anticipated conversion or dismissal of the FSS case, Jones said that he does not believe his own estate would benefit by staying in Chapter 11. Furthermore, he does not anticipate that a resolution could be reached with other interested parties that would be sufficient to confirm a Chapter 11 reorganization plan. Drawing out the Chapter 11 process just to complete the liquidation would generate additional administrative expenses with little benefit to the estate, Jones said. For these reasons, he wants to convert the Chapter 11 case to Chapter 7.

Jones asserted in the motion that the requirements for conversion set forth in section 1112(a) of the Bankruptcy Code are satisfied in this case. He is a debtor-in-possession under sections 1107 and 1108 of the Bankruptcy Code, and he filed his Chapter 11 case voluntarily. There has been no prior conversion. Jones said he is eligible for Chapter 7 bankruptcy and could have initiated his case originally under that chapter. Therefore, section 1112(a) provides an “absolute right” under the circumstances to convert his case to Chapter 7, Jones argued.

After Jones recently warned that his media company faced an imminent shutdown by the federal government because of his bankruptcy cases, Judge Lopez allowed Jones to keep operating for the next two weeks while deciding whether his assets should be liquidated, according to AP News. Both Jones and FSS entered bankruptcy after he lost two lawsuits and was ordered to pay USD 1.5bn to relatives of victims of the Sandy Hook shooting.