Houston Judge Strips Alex Jones of Bankruptcy Protection

Houston Judge Strips Alex Jones of Bankruptcy Protection

$1.5 Billion Judgement Regarding Sandy Hook Families – Ended a Stay Preventing Families from Proceeding in Litigation

Alex Jones is a radio host sued and found liable for defamation damages regarding Jones, the host of the “Infowars” brand and publication to pay $965 million in damages to Sandy Hook Elementary School shooting victims and families as well as $473 million in punitive damages, for a total of $1.44 billion.

Jones recently filed for Chapter 11 bankruptcy protection. A bankruptcy filing triggers the automatic stay provision that legally prevents any person or entity from pursuing collection against the person in bankruptcy during the pendency of their case. In this case, the bankruptcy judge allowed and ordered an exception to the automatic stay, allowing the families to continue in litigation.

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The Court’s order modifies the automatic stay provision in the case, automatic protection immediately ceasing collection activities and lawsuits for bankruptcy filers. In this case, the Court’s order allows the plaintiffs, “immediately…(i) allow the Sandy Hook Post-Trial Families’ Cases to continue to proceed to the entry of final judgment and (ii) once judgments are entered, to allow appeals, if any, to proceed and the Sandy Hook Post-Trial Families to pursue, respond to and participate in such appeals without further order of the Court.”

The Automatic Stay Preventing Families from Collecting is a Federal Bankruptcy Protection Activated Upon Alex Jones Filing a Bankruptcy Petition

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Plaintiffs who file bankruptcy petitions get the protection of the “Automatic Stay” when their bankruptcy petition is filed. Notice of the bankruptcy case and the automatic stay is sent to the creditors listed in the bankruptcy petition. The creditors cannot do anything to pursue a bankruptcy petitioner for money damages or collections unless they file a motion with the Bankruptcy Court requesting relief to override the automatic stay protection. In this case, the Court made an exception, allowing the families to continue in litigation and any appeals they may need to litigate, while Jones’ and his companies’ bankruptcy cases continue.

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Alex Jones Filed a Personal Chapter 11 Bankruptcy, a Corporation or Partnership Bankruptcy

Famous people, professional athletes, actors, musicians, performers, and general celebrities commonly form legal entities with their names and likeness as the product or brands. So, Alex Jones as a personal corporation is a business and may make contracts and engage in business as a corporate entity which falls under the Chapter 11 section of the U.S. Bankruptcy Code. Otherwise, Jones could have filed a personal bankruptcy as an individual person pursuant to Chapter 7 or Chapter 13.

Post-Trial Cases Could Proceed to Judgement and Appeals if Any with Families

Many plaintiffs with many legal issues have ongoing litigation and appeals on issues that are tried before a judge or jury depending on how their cases are filed and litigated. Against Alex Jones and his business and entities, some plaintiffs already have money judgments and want to collect, while others are in the process, which might include appeals to higher courts during or after trial court.

The families continuing in their litigation would have to stop all activity simply because the respondent files a bankruptcy case. Even though there are many plaintiffs, with big money suits, and lots on the line, it all comes to a halt as a matter of federal law. That immediately affects all the lawyers, all the plaintiff clients, all the experts, and everyone else involved in long-term litigation. So, when the bankruptcy court is asked to override the automatic stay provision and allow the cases to proceed in part, is a big deal. It does not mean, however, that the families will collect any money.

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