Next Phase of Alex Jones Bankruptcy Gambit Unfolds

When Alex Jones filed bankruptcy for three of his entities holding intellectual property and contract rights, it wasn't immediately clear how these filings would help him resolve his larger legal problems. Now it has unfolded that Mr. Jones is using the bankruptcy filings as a vehicle for removing state court actions against him to federal court.  On April 18, 2022, attorneys for the Debtors removed eight state court lawsuits to U.S. Bankruptcy Court: five in Texas and three in Connecticut. 

The removed actions are:

Adv. No. 22-1021; Pozner, et al v. Jones, et al (Bankr. W.D. Tex.)

Adv. No. 22-1022; Fontaine v. Jones, et al (Bankr. W.D. Tex.)

Adv. No. 22-1023; Heslin v. Jones, et al (Bankr. W.D. Tex.)

Adv. No. 22-1024; Lewis v. Jones, et al (Bankr. W.D. Tex.)

Adv. No. 22-6004; Heslin v. InfoW, LLC (Bankr. W.D. Tex.)

Adv. No. 22-5004; Lafferty, et al v. Jones, et al (Bankr. D. Conn.)

Adv. No. 22-5005; Sherlach v. Jones, et al (Bankr. D. Conn.)

Adv. No. 22-5006; Sherlach v. Jones, et al (Bankr. D. Conn.)

What the debtors have accomplished in the short run is to derail the pending litigation. Once a case is removed to federal court, it no longer resides in state court and cannot proceed.  This has a benefit to the non-debtor defendants, such as Alex Jones, who also enjoy a temporary reprieve from being sued.

Under bankruptcy law, an action may only be removed to the district where the suit was pending.  A collateral consequence of the removals is that Jones-related cases are now pending before four separate bankruptcy judges. Judge Christopher Lopez is the judge over the main bankruptcy cases pending in Victoria, Texas. H. Christopher Mott is the judge for the four cases removed from Travis County, Texas. Judge Michael Parker is the judge over one case that was removed to the Waco Division. Finally, Judge Julie A. Manning is judge over the three cases removed to the Connecticut bankruptcy court.

What this means for the constellation of Jones-related litigation is that any pending trials are thrown into limbo. For the debtors, the goal is to move the cases to a more favorable venue and to slow things down while they try to reach a global solution. For the plaintiffs, the goal is to get their litigation back on track and establish that the debtors and their related parties are manipulating the system. 

What happens next depends upon the parties. The three judges presiding over the removed cases will likely convene status conferences to determine how to proceed. The Debtors may move to transfer the cases to the district where the main cases are pending. It is almost certain that the plaintiffs' lawyers will ask to have the cases sent back to state court. According to reporting in the Austin American Statesman, in at least one case, the plaintiffs had dismissed out the debtor entity prior to the removal, which would deprive the court of jurisdiction.