Sandy Hook parents seek to stop InfoWars bankruptcy payments to Alex Jones

By Dietrich Knauth

(Reuters) - Parents of children killed in the 2012 Sandy Hook school massacre urged a U.S. bankruptcy judge on Wednesday not to allow the parent company of far-right website InfoWars to send any money to its founder, conspiracy theorist Alex Jones, or his companies until they have an opportunity to get to the bottom of InfoWars' finances.

As a jury deliberates in Austin, Texas, over how much Jones must pay two parents for his false claims that the deadly shooting was a hoax, families of Sandy Hook victims who have sued Jones for defamation in that trial and others who have sued in Connecticut warned a bankruptcy judge in Houston that Jones might continue to pull assets from InfoWars parent company Free Speech Systems LLC while using its bankruptcy case to avoid paying court judgments in the defamation cases.

Marty Brimmage, an attorney for the Sandy Hook parents, told U.S. Bankruptcy Judge Christopher Lopez in Houston on Wednesday that Jones had told his audience that the bankruptcy would "tie up" any defamation judgment for years.

Judges in the Texas and Connecticut cases have already found Jones liable for defamation. The parents in the Texas trial are seeking a judgment of $150 million.

Jones testified Wednesday in Austin, admitting that the Sandy Hook shooting was real and that it was "crazy" of him to call it a hoax. The jury has begun deliberations.

The company's attorneys told the bankruptcy judge on Wednesday that they were only making a "boring" request for permission to make routine payments on debts during the first weeks of its Chapter 11. The company filed for bankruptcy last Friday.

But the Sandy Hook families said the company could not be trusted to make accurate statements about its finances. They also allege that Jones took $62 million from the company while burdening it with $65 million in "fabricated" debt owed to PQPR Holdings, a company owned by Jones and his parents.

Lopez approved a two-week budget that would allow the company to pay its bills, but he limited the amount it could pay Jones and the company's consultants during that period.