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Bankruptcy judge approves higher payments for InfoWars vendor

Alex Jones of Infowars foretells the media while visiting the U.S. Senate’s Dirksen Senate workplace as Twitter CEO Jack Dorsey testifies before a Senate Intelligence Committee hearing on Capitol Hill in Washington, U.S., September 5, 2018. REUTERS/Jim Bourg

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  • Sandy Hook families opposed the payments
  • Shipping vendor Blue Ascension was formed by ex-Free Speech Systems employees
  • Blue Ascension’s owner took a $400,000 payment from Alex Jones this week

(Reuters) – The parent company of far-right website InfoWars received a U.S. bankruptcy judge’s permission on Friday to create higher-than-expected payments to a vendor that ships InfoWars-branded health supplements along with other products to customers.

U.S. Bankruptcy Judge Christopher Lopez in Houston approved a request by Free Speech Systems LLC, that is owned by conspiracy theorist Alex Jones, to cover its shipping and fulfillment vendor a set $20 fee per order, exceeding a cap he previously set on those payments on August 3, despite saying he previously concerns concerning the “unique relationship” between your companies.

FSS had told the court it needed more flexibility to create higher shipping payments because of “surge” popular because of its dietary supplements along with other products.

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FSS filed for bankruptcy on July 29, in the center of a trial to find out just how much it and Jones should purchase making false and defamatory claims that the 2012 Sandy Hook elementary school massacre was a hoax. A Texas jury later awarded nearly $50 million in compensatory and punitive damages to the parents of slain 6-year-old Jesse Lewis.

Sandy Hook families, who’ve sued Jones and FSS in Connecticut and Texas and also have argued that the bankruptcy can be an effort in order to avoid paying defamation verdicts, opposed the request.

Ryan Chapple, a lawyer for the Connecticut families, said it tripped “plenty of alarm bells” concerning the possibility that Jones and FSS were funneling money from FSS in order to avoid paying creditors in the bankruptcy.

Lopez said he shared most of the concerns raised by Sandy Hook families, noting that the shipping vendor Blue Ascension was formed by former FSS employees and took over FSS’s shipping and fulfillment services on the eve of FSS’s bankruptcy filing.

The “unique” relationship between your two companies and their owners “deserves further examination,” Lopez said, but he approved increased payments for another 13 days.

“The more people that want to get the merchandise, the additional money is available to cover creditors,” Lopez said. “That is clearly a positive thing for the estate.”

The Sandy Hook families argued in court that Jones orchestrated the outsourcing of FSS’s formerly in-house shipping services to a detailed friend and sometime fitness expert, Patrick Riley, who performed a number of tasks for Jones and who had no other experience in shipping and fulfillment. Riley testified he spoke to Jones about hiring FSS employees for his new company and said that Jones wrote him a $400,000 take a look week to speed Blue Ascension’s delivery of InfoWars products.

Marc Schwartz, InfoWars’ chief restructuring officer, said Blue Ascension had not been associated with Jones and was the only real company in a position to deliver InfoWars products to customers.

The case is Free Speech Systems LLC, U.S. Bankruptcy Court for the Southern District of Texas, No. 22-60043.

For FSS: Ray Battaglia of regulations Offices of Ray Battaglia and R.J. Shannon of Shannon & Lee

For the Sandy Hook families: Ryan Chapple of Cain & Skarnulis and Marty Brimmage of Akin Gump Strauss Hauer & Feld

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Our Standards: The Thomson Reuters Trust Principles.

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