AUSTIN (KXAN) — Alex Jones has seen his company’s sales “surge,” according to recent court filings, after a jury’s multi-million dollar verdict against the Austin-based conspiracy theorist and media personality.
Free Speech Systems, LLC — the parent company of Jones’ website, Infowars — filed for bankruptcy at the end of July, amid the ongoing defamation trial over his claims the Sandy Hook shooting was fake.
In a court filing this week, the attorney representing Free Speech Systems (FSS) said the company was “facing a crisis in being able to fulfill product sales,” after its sales “far exceeded the budgeted sales projections.” The document goes on to say that, according to estimates by the Chief Restructuring Officer, the company’s revenues could increase to as much as $450,000 per day — compared to the projected weekly revenues of $595,489 per week.
“While this is good news on the one hand, it could be catastrophically dangerous if FSS cannot timely fulfill these new orders. The use [of] a “static” model to project fulfillment costs in the Budget has led to serious under-budgeting of this expense item of the Debtor’s business,” according to the filing for emergency relief.
The Chief Restructuring Officer, Marc Schwartz, testified in a bankruptcy hearing on Friday about the relationship between Free Speech Systems and a fulfillment company called Blue Ascension. The court filing and hearing testimony noted that Blue Ascension charges $20 per order — which includes the handling of receipt of inventory shipments, stocking shelves, picking merchandise for orders, boxing, and shipping FSS’s orders.
In the filing, they requested the credit card processor withhold $20 for every order shipped from the daily settlement and “remit those funds directly to Blue Ascension.”
The head of Blue Ascension, Patrick Riley, testified during the virtual hearing, as well. The former Infowars employee said he started the company in March to fill a need after FSS “got out of the fulfillment business.” He testified that while the majority of Blue Ascension’s employees used to work for Infowars and while they are operating out of a warehouse leased by FSS, Alex Jones and his family members have no business interest in Blue Ascension.
Riley also told the court that Jones sent a wire to his bank account this week for $400,000, but that he and Jones signed a contract saying Jones will get no interest.
Raymond Battaglia, representing FSS, argued that it was “good news” sales were expected to surge — citing “more eyeballs” on the site because of the trial.
“I assume everybody wants to see the debtor generate greater revenue,” he said, urging them to consider the positive effects of “more money in the estate to pay creditors.”
Meanwhile, another attorney argued that there were “a lot of alarm bells going off” about the nature of the relationship between Blue Ascension and FSS. Another attorney told the judge, “Alex Jones is backing the whole thing. This isn’t an arms-length deal.”
The judge ultimately granted the emergency motion for relief for the next 12 days, but he also said there would likely be more investigation into the “unique business relationship” between Blue Ascension and Free Speech Systems.
Friday’s hearing in federal bankruptcy court comes one week after a civil jury ordered Jones and his company to pay nearly $50 million in one of the defamation lawsuits filed against him in the Texas courts.