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That's not what this judgement says. It actually says the sale did not generate enough money for the creditors and the process should be run again. I think the

by ajb 2y ago

That's not what this judgement says. It actually says the sale did not generate enough money for the creditors and the process should be run again. I think the Judge maybe naive in thinking that re-running an auction will generate more money (normally it will generate less, as the losing bidders will drop out) but he did not agree with Jones' claims.

toomuchtodo 2y ago
Will he keep running do overs until he gets the outcome he wants?
- goodluckchuck 2y ago
  From what the internet says, it didn’t go to the highest bidder.
  - munk-a 2y ago
    It's complicated - it went to the bidder that would result in the two largest debtors being the happiest with the outcome but that bidder didn't bid the most money in a regular manner. The structure of the bid was quite complex but essentially the largest debtor agreed to enlarge the share the second largest debtor would receive by supplementing it from their own share due to the awards in the two court cases being so drastically different (basically the largest debtor decided to decrease their own share in that specific bid to supplement the second largest debtor) - this bid was the one that the primary debtor prefers and would award a lot more value to the secondary debtor than the bid that was, on paper, larger. There are some good detailed analyses of the arrangement out there that would give you a much better understanding than I can communicate second-hand - I'd suggest the overview by LegalEagle[1], personally. 1. https://youtu.be/GmDNz7irGgw https://youtu.be/GmDNz7irGgw
    - JumpCrisscross 2y ago
      > went to the bidder that would result in the two largest debtors being the happiest with the outcome but that bidder didn't bid the most money in a regular manner The creditors own the asset. If every dollar the creditors are owed voted, which bid would they choose?
      - munk-a 2y ago
        The onion bid - by far. If the bid was chosen by creditors weighted by owed value the Connecticut families would solely dictate the terms as they are owed more than 90% of the value resulting from this auction.
      - toomuchtodo 2y ago
        > The creditors own the asset If this is the case, dollars voted are less important than outcome value to the creditors. It is their asset, no? They are assigning value and signaling accordingly.
        JumpCrisscross 2y ago
        > dollars voted are less important than outcome value to the creditors. It is their asset, no? Sure. I’m trying to approximate a metric that gives their weighted interest. My point is the owners of the asset are selling it, and it seems their interests are obviously maximised by one bid.
    - amyames 2y ago
      Just navel gazing here maybe there is case precedent or law here. The debtor generally deserves their case to be discharged resolved liquidated closed and done forever. Paying ongoing reparations in royalties or whatever the onion proposes doesn’t accomplish this. Alex Jones himself could convert his case to a chapter 13 and set up a “repayment” plan based on his own anticipated/potential earnings from his own business. It would possibly even be higher, infowars intended audience is probably more profitable than people laughing at infowars on Ben Collins bluesky feed. The people who got a personal judgment aren’t made whole by a promise of future restitution by someone purchasing his business assets. What if the onion went bankrupt next year and said oh we’re not going to pay that anymore? That would be an interesting case to test: a person being relieved from a fraud or criminal tort, as it’s handed off to a third party buying their business, who themselves didn’t commit fraud or a criminal tort and merely became insolvent which is dischargeable. In the case where the “creditors” own the asset to settle their claim, that’s another story, whether they make $1 or a billion dollars disposing of it is no longer the debtors problem In the same way that returning my smashed up uninsured car to a secured lender doesn’t make them whole for my discharged loan either.
      - Suppafly 2y ago
        >Paying ongoing reparations in royalties or whatever the onion proposes doesn’t accomplish this. Sure it does, the Onion would be paying the royalties, Alex Jones already doesn't own it, it's essentially owned by an estate that is selling it off to cover Alex Jones' debts.
    - adolph 2y ago
      That’s a lot of text to say “yes, it didn’t go to the highest bidder.“
      - munk-a 2y ago
        That's incorrect - it's a lot of text to say it went to the second highest bidder. The onion bid was the one that provided more value to the creditors.
        Supermancho 2y ago
        From what I've read, it's not incorrect. Orthogonal valuations are not part of the bid value. This is why The Onion was second (the winner). It was not the highest bid (the considered part). The end. The Judge has decided that's unfair, likely due to some bias (intellectual, political, etc.)
  - pdpi 2y ago
    Put simply, the internet is wrong. FUAC's offer was all cash. The Onion offered less cash, but offered other incentives (AIUI, a share of whatever revenue they make from Infowars in the future). Saying that The Onion's bid was lower requires you to put a dollar value on those other incentives. The fact that the two creditors (read: victims' families) that would benefit from those incentives were willing to sacrifice some of the debt they were owed so they could benefit from those incentives suggests that at least _they_ think those incentives were worth more than the cash upfront, and the amount of debt they were willing to sacrifice gives you an implicit baseline for that dollar value. Given the site we're on: it's like saying that an offer with a lower base salary but higher equity is automatically a worse offer than a bigger salary with no stock.
    - sidewndr46 2y ago
      The idea that Global Tetrahedron would generate revenue from InfoWars is a farce. Jones is InfoWars. Any market value assigned to InfoWars without Jones explicitly involvement is a farce. Even a non bankruptcy sale of InfoWars would require him to participate in the business for an extended period of time. Even then, it'd just be some investor bankrolling Jones.
      - pdpi 2y ago
        That might or might not be true. If Infowars is _that_ worthless without Jones, then _any_ offer is a farce and the whole auction is pointless.
        lupusreal 2y ago
        > If Infowars is _that_ worthless without Jones, then _any_ offer is a farce That doesn't make sense. A genuine offer for an unprofitable thing could be made. That's not farcical, just a bad investment.
        pdpi 2y ago
        Yes, that's precisely what I mean. It might or might not be a bad bet, but the Sandy Hook families are just as entitled to take that bet as anybody else. The idea that it's farcical to entertain any offer that doesn't involve putting Jones back in charge leads you down a really weird road.
a12k 2y ago
The creditors agreed to and supported the Global Tetrahedron plan to purchase Infowars and settle the bankruptcy. Seems like the judge is overstepping given Delaware law on this matter.
- ensignavenger 2y ago
  Bankruptcy law is federal law, Delaware law has nothing to do with it.
  - a12k 2y ago
    They typically file in the United States Court for the District of Delaware, a federal court located in Delaware. Delaware law plays a significant part in these cases even though they’re in Fed court. Corporate charters, filings, fiduciary duties, property rights, choice of laws, etc etc etc are all determined by Delaware law and used in the federal court. Federal Bankruptcy Law provides the procedural framework. So, Delaware law does in fact have nearly everything to do with it.
    - dragonwriter 2y ago
      > Federal Bankruptcy Law provides the procedural framework. Federal bankruptcy law sets the substantive as well as procedural rules for bankruptcy, and its substantive provisions trump any state law, but, OTOH, state law has some role both in determining what the set of claims going in to bankruptcy are and, to the extent permitted in federal bankruptcy law, setting things like allowable personal exemptions, etc.
      - a12k 2y ago
        Yep! This is all correct. The point remains, however, that Delaware law does have a substantial amount to do with bankruptcy proceedings in Delaware, which is really the point I was responding to.
        ensignavenger 2y ago
bluGill 2y ago
Will the losing bidders drop out, or not? In a sealed bid you have to guess what others will bid - you want to bid $1 more than your competitors (or if you will lose the bid make your competitor pay as much as possible). The judge is saying because the bids were seals losing bidders had no clue what their correct bid is and some are likely to have bid less than they would have in open bidding. Who is right I don't know.
- JumpCrisscross 2y ago
  > judge is saying because the bids were seals losing bidders had no clue what their correct bid is and some are likely to have bid less than they would have in open bidding. Who is right I don't know. Sealed-bid auctions are incredibly common across markets [1]. Real estate. Corporate mergers. Note, too, that an English auction is revenue equivalent to a second-price sealed-bid auction [2], and here we had a first-price sealed-bid auction with two bidders. There may be valid reasons to challenge this auction. Sealed bids is absolutely, definitively not one. [1] https://en.m.wikipedia.org/wiki/First-price_sealed-bid_auction https://en.m.wikipedia.org/wiki/First-price_sealed-bid_aucti... [2] https://www.sfu.ca/~idudnyk/Auctions_Part2_Revenue_Equivalence.pdf https://www.sfu.ca/~idudnyk/Auctions_Part2_Revenue_Equivalen...
  - iav 2y ago
    you need a lot more than 2 bidders for the theory to hold. Repeating the auction just seems pointless, but another avenue could be for the assets to not be sold, and the claimants to receive 100% of the equity of the business. Then over time they can potentially see a better recovery than what they are getting from a sale.
    - JumpCrisscross 2y ago
      > you need a lot more than 2 bidders for the theory to hold Wrong. Vickrey auctions are well studied in single-item auctions even with two bidders [1]. (They perform between 4/3 and 2 compared to an optimal omniscient auction. Not solved. But not unstudied.) > claimants to receive 100% of the equity of the business This is Chapter 7. The bankruptcy estate already legally owns the asset, not Jones. [1] https://www.timroughgarden.org/papers/bk.pdf https://www.timroughgarden.org/papers/bk.pdf Examples 4.6 and 5.2
avs733 2y ago
Taking the judges decision at face value here is fundamentally the problem - because it relies largely on Alex Jones as an arbiter of reality. The judge seems to take Jones, the guy who lost the auction, as the arbiter of what happened. That is a problem and not just because of the strong potential for bias, and not just because the trustee would be a more obvious source of truth - because he ran the auction. Its a problem at a deeper level because the judge seems set on taking Alex Jones as a good faith actor. Every step in the court process has shown that not to be true. We aren't here randomly and this bankruptcy doesn't exist in a vacuum. Even setting aside that nonsense. THe judge seems confused on the difference between money and value. Thats the type of thing an undergrad gets wrong.
mountainriver 2y ago
Yep so that Elon can step in and buy it
- flatline 2y ago
  This is the comment I was looking for. He said he was going to intervene and something to the effect of “fix it.” This seems like a logical outcome of that statement.
  - dylan604 2y ago
    You know, if Elon buys it at the same levels of inflated values he did for Twitter so that the creditors get paid, I'm kind of okay with that. Just kind of. His fix will not go to Jones. Jones is not going away however this ends. Just the brand. He can create a new brand.
    - paulpauper 2y ago
      without jones then what good is the brand?
      - dylan604 2y ago
        Jones will create his own new brand once this is settled. So it is more of a question to the bankruptcy court itself, as I would agree that there's no value in Infowars without Jones. So my opening bid to the court is $1.
    - itsoktocry 2y ago
      >You know, if Elon buys it at the same levels of inflated values he did for Twitter so that the creditors get paid, He paid $44B. He probably could have got it for less at the time, but if you think it's not worth that, I'm not sure what to tell you. It's literally where all news gets broken. All of it. And he's using it to influence global politics.
      - 2y ago
BadHumans 2y ago
Elon is going to be the highest bidder if they run the process again.
- rbanffy 2y ago
  Maybe Alex Jones will also get a nice contract to sell his vitamins to the US armed forces.
chollida1 2y ago
> I think the Judge maybe naive in thinking that re-running an auction will generate more money (normally it will generate less, as the losing bidders will drop out) but he did not agree with Jones' claims. What evidence are you basing this on?
- ajb 2y ago
  I no longer remember the title of the paper but it was on the Gordon-Brown-era spectrum auctions. Basically if bidders can obtain information about each others preferences other than via the auction - or in some cases even via the auction - the expected price is lower. I think it applies when a limited number of bidders are interested. If Elon is interested then all bets are off :-)
randomfool 2y ago
The actual issue is that the winning bid was $7m- $1.75m cash + $5.25m in debt forgiveness. The question is whether that bid is higher than the competing $3.5m all-cash bid. That $5.25m debt forgiveness would have to be valued at $1.75m or more for the winning bid to actually be higher, but if other creditors are assuming that they will have losses of higher than 66% then the $3.5m all-cash bid would actually be better for other creditors.

by ajb 2y ago

toomuchtodo 2y ago

Will he keep running do overs until he gets the outcome he wants?

goodluckchuck 2y ago
From what the internet says, it didn’t go to the highest bidder.
- munk-a 2y ago
  It's complicated - it went to the bidder that would result in the two largest debtors being the happiest with the outcome but that bidder didn't bid the most money in a regular manner. The structure of the bid was quite complex but essentially the largest debtor agreed to enlarge the share the second largest debtor would receive by supplementing it from their own share due to the awards in the two court cases being so drastically different (basically the largest debtor decided to decrease their own share in that specific bid to supplement the second largest debtor) - this bid was the one that the primary debtor prefers and would award a lot more value to the secondary debtor than the bid that was, on paper, larger. There are some good detailed analyses of the arrangement out there that would give you a much better understanding than I can communicate second-hand - I'd suggest the overview by LegalEagle[1], personally. 1. https://youtu.be/GmDNz7irGgw https://youtu.be/GmDNz7irGgw
  - JumpCrisscross 2y ago
    > went to the bidder that would result in the two largest debtors being the happiest with the outcome but that bidder didn't bid the most money in a regular manner The creditors own the asset. If every dollar the creditors are owed voted, which bid would they choose?
    - munk-a 2y ago
      The onion bid - by far. If the bid was chosen by creditors weighted by owed value the Connecticut families would solely dictate the terms as they are owed more than 90% of the value resulting from this auction.
    - toomuchtodo 2y ago
      > The creditors own the asset If this is the case, dollars voted are less important than outcome value to the creditors. It is their asset, no? They are assigning value and signaling accordingly.
      - JumpCrisscross 2y ago
        > dollars voted are less important than outcome value to the creditors. It is their asset, no? Sure. I’m trying to approximate a metric that gives their weighted interest. My point is the owners of the asset are selling it, and it seems their interests are obviously maximised by one bid.
  - amyames 2y ago
    Just navel gazing here maybe there is case precedent or law here. The debtor generally deserves their case to be discharged resolved liquidated closed and done forever. Paying ongoing reparations in royalties or whatever the onion proposes doesn’t accomplish this. Alex Jones himself could convert his case to a chapter 13 and set up a “repayment” plan based on his own anticipated/potential earnings from his own business. It would possibly even be higher, infowars intended audience is probably more profitable than people laughing at infowars on Ben Collins bluesky feed. The people who got a personal judgment aren’t made whole by a promise of future restitution by someone purchasing his business assets. What if the onion went bankrupt next year and said oh we’re not going to pay that anymore? That would be an interesting case to test: a person being relieved from a fraud or criminal tort, as it’s handed off to a third party buying their business, who themselves didn’t commit fraud or a criminal tort and merely became insolvent which is dischargeable. In the case where the “creditors” own the asset to settle their claim, that’s another story, whether they make $1 or a billion dollars disposing of it is no longer the debtors problem In the same way that returning my smashed up uninsured car to a secured lender doesn’t make them whole for my discharged loan either.
    - Suppafly 2y ago
      >Paying ongoing reparations in royalties or whatever the onion proposes doesn’t accomplish this. Sure it does, the Onion would be paying the royalties, Alex Jones already doesn't own it, it's essentially owned by an estate that is selling it off to cover Alex Jones' debts.
  - adolph 2y ago
    That’s a lot of text to say “yes, it didn’t go to the highest bidder.“
    - munk-a 2y ago
      That's incorrect - it's a lot of text to say it went to the second highest bidder. The onion bid was the one that provided more value to the creditors.
      - Supermancho 2y ago
        From what I've read, it's not incorrect. Orthogonal valuations are not part of the bid value. This is why The Onion was second (the winner). It was not the highest bid (the considered part). The end. The Judge has decided that's unfair, likely due to some bias (intellectual, political, etc.)
- pdpi 2y ago
  Put simply, the internet is wrong. FUAC's offer was all cash. The Onion offered less cash, but offered other incentives (AIUI, a share of whatever revenue they make from Infowars in the future). Saying that The Onion's bid was lower requires you to put a dollar value on those other incentives. The fact that the two creditors (read: victims' families) that would benefit from those incentives were willing to sacrifice some of the debt they were owed so they could benefit from those incentives suggests that at least _they_ think those incentives were worth more than the cash upfront, and the amount of debt they were willing to sacrifice gives you an implicit baseline for that dollar value. Given the site we're on: it's like saying that an offer with a lower base salary but higher equity is automatically a worse offer than a bigger salary with no stock.
  - sidewndr46 2y ago
    The idea that Global Tetrahedron would generate revenue from InfoWars is a farce. Jones is InfoWars. Any market value assigned to InfoWars without Jones explicitly involvement is a farce. Even a non bankruptcy sale of InfoWars would require him to participate in the business for an extended period of time. Even then, it'd just be some investor bankrolling Jones.
    - pdpi 2y ago
      That might or might not be true. If Infowars is _that_ worthless without Jones, then _any_ offer is a farce and the whole auction is pointless.
      - lupusreal 2y ago
        > If Infowars is _that_ worthless without Jones, then _any_ offer is a farce That doesn't make sense. A genuine offer for an unprofitable thing could be made. That's not farcical, just a bad investment.
        pdpi 2y ago
        Yes, that's precisely what I mean. It might or might not be a bad bet, but the Sandy Hook families are just as entitled to take that bet as anybody else. The idea that it's farcical to entertain any offer that doesn't involve putting Jones back in charge leads you down a really weird road.

a12k 2y ago

The creditors agreed to and supported the Global Tetrahedron plan to purchase Infowars and settle the bankruptcy. Seems like the judge is overstepping given Delaware law on this matter.

ensignavenger 2y ago
Bankruptcy law is federal law, Delaware law has nothing to do with it.
- a12k 2y ago
  They typically file in the United States Court for the District of Delaware, a federal court located in Delaware. Delaware law plays a significant part in these cases even though they’re in Fed court. Corporate charters, filings, fiduciary duties, property rights, choice of laws, etc etc etc are all determined by Delaware law and used in the federal court. Federal Bankruptcy Law provides the procedural framework. So, Delaware law does in fact have nearly everything to do with it.
  - dragonwriter 2y ago
    > Federal Bankruptcy Law provides the procedural framework. Federal bankruptcy law sets the substantive as well as procedural rules for bankruptcy, and its substantive provisions trump any state law, but, OTOH, state law has some role both in determining what the set of claims going in to bankruptcy are and, to the extent permitted in federal bankruptcy law, setting things like allowable personal exemptions, etc.
    - a12k 2y ago
      Yep! This is all correct. The point remains, however, that Delaware law does have a substantial amount to do with bankruptcy proceedings in Delaware, which is really the point I was responding to.
      - ensignavenger 2y ago

bluGill 2y ago

Will the losing bidders drop out, or not? In a sealed bid you have to guess what others will bid - you want to bid $1 more than your competitors (or if you will lose the bid make your competitor pay as much as possible). The judge is saying because the bids were seals losing bidders had no clue what their correct bid is and some are likely to have bid less than they would have in open bidding. Who is right I don't know.

JumpCrisscross 2y ago
> judge is saying because the bids were seals losing bidders had no clue what their correct bid is and some are likely to have bid less than they would have in open bidding. Who is right I don't know. Sealed-bid auctions are incredibly common across markets [1]. Real estate. Corporate mergers. Note, too, that an English auction is revenue equivalent to a second-price sealed-bid auction [2], and here we had a first-price sealed-bid auction with two bidders. There may be valid reasons to challenge this auction. Sealed bids is absolutely, definitively not one. [1] https://en.m.wikipedia.org/wiki/First-price_sealed-bid_auction https://en.m.wikipedia.org/wiki/First-price_sealed-bid_aucti... [2] https://www.sfu.ca/~idudnyk/Auctions_Part2_Revenue_Equivalence.pdf https://www.sfu.ca/~idudnyk/Auctions_Part2_Revenue_Equivalen...
- iav 2y ago
  you need a lot more than 2 bidders for the theory to hold. Repeating the auction just seems pointless, but another avenue could be for the assets to not be sold, and the claimants to receive 100% of the equity of the business. Then over time they can potentially see a better recovery than what they are getting from a sale.
  - JumpCrisscross 2y ago
    > you need a lot more than 2 bidders for the theory to hold Wrong. Vickrey auctions are well studied in single-item auctions even with two bidders [1]. (They perform between 4/3 and 2 compared to an optimal omniscient auction. Not solved. But not unstudied.) > claimants to receive 100% of the equity of the business This is Chapter 7. The bankruptcy estate already legally owns the asset, not Jones. [1] https://www.timroughgarden.org/papers/bk.pdf https://www.timroughgarden.org/papers/bk.pdf Examples 4.6 and 5.2

avs733 2y ago

Taking the judges decision at face value here is fundamentally the problem - because it relies largely on Alex Jones as an arbiter of reality. The judge seems to take Jones, the guy who lost the auction, as the arbiter of what happened. That is a problem and not just because of the strong potential for bias, and not just because the trustee would be a more obvious source of truth - because he ran the auction. Its a problem at a deeper level because the judge seems set on taking Alex Jones as a good faith actor. Every step in the court process has shown that not to be true. We aren't here randomly and this bankruptcy doesn't exist in a vacuum. Even setting aside that nonsense. THe judge seems confused on the difference between money and value. Thats the type of thing an undergrad gets wrong.

mountainriver 2y ago

Yep so that Elon can step in and buy it

flatline 2y ago
This is the comment I was looking for. He said he was going to intervene and something to the effect of “fix it.” This seems like a logical outcome of that statement.
- dylan604 2y ago
  You know, if Elon buys it at the same levels of inflated values he did for Twitter so that the creditors get paid, I'm kind of okay with that. Just kind of. His fix will not go to Jones. Jones is not going away however this ends. Just the brand. He can create a new brand.
  - paulpauper 2y ago
    without jones then what good is the brand?
    - dylan604 2y ago
      Jones will create his own new brand once this is settled. So it is more of a question to the bankruptcy court itself, as I would agree that there's no value in Infowars without Jones. So my opening bid to the court is $1.
  - itsoktocry 2y ago
    >You know, if Elon buys it at the same levels of inflated values he did for Twitter so that the creditors get paid, He paid $44B. He probably could have got it for less at the time, but if you think it's not worth that, I'm not sure what to tell you. It's literally where all news gets broken. All of it. And he's using it to influence global politics.
    - 2y ago

BadHumans 2y ago

Elon is going to be the highest bidder if they run the process again.

rbanffy 2y ago
Maybe Alex Jones will also get a nice contract to sell his vitamins to the US armed forces.

chollida1 2y ago

> I think the Judge maybe naive in thinking that re-running an auction will generate more money (normally it will generate less, as the losing bidders will drop out) but he did not agree with Jones' claims. What evidence are you basing this on?

ajb 2y ago
I no longer remember the title of the paper but it was on the Gordon-Brown-era spectrum auctions. Basically if bidders can obtain information about each others preferences other than via the auction - or in some cases even via the auction - the expected price is lower. I think it applies when a limited number of bidders are interested. If Elon is interested then all bets are off :-)

randomfool 2y ago

The actual issue is that the winning bid was $7m- $1.75m cash + $5.25m in debt forgiveness. The question is whether that bid is higher than the competing $3.5m all-cash bid. That $5.25m debt forgiveness would have to be valued at $1.75m or more for the winning bid to actually be higher, but if other creditors are assuming that they will have losses of higher than 66% then the $3.5m all-cash bid would actually be better for other creditors.