By Dietrich Knauth
(Reuters) -Families of the victims of the 2012 Sandy Hook Elementary School massacre will be dismissed from the InfoWars bankruptcy case, allowing them to resume their defamation lawsuits against the website's owner, conspiracy theorist Alex Jones, attorneys said in court on Friday.
Lawyers for the families had accused the far-right-wing website of seeking Chapter 11 protection in Texas for "sinister" purposes, and sought to have the bankruptcy dismissed.
They had alleged that the case was not filed for a valid purpose under bankruptcy law but to force the families into settlements instead of proceeding with trials that will determine the amount of damages they are owed for defamation judgments relating to Jones' false claims that the school mass shooting was a hoax.
InfoWars attorney Kyun Lee on Friday said the dispute is close to being resolved by allowing the families to withdraw their claims against the bankrupt InfoWars entities and resume litigation against non-bankrupt defendants, like Alex Jones.
"They decided they don't want to participate in these cases, and we're fine with that," Lee said.
The agreement with the Sandy Hook families has not been finalized, Lee said.
U.S. Bankruptcy Judge Christopher Lopez said he hoped for a resolution but would continue to prepare for a May 27 hearing on whether the bankruptcy case should be dismissed. The U.S. Department of Justice's bankruptcy watchdog had also called for the case to be dismissed. Lee said that objection was close to being resolved too.
Jones claimed the shooting, in which 20 first graders and six school employees were shot dead at the school in Newtown, Connecticut, was fabricated by gun-control advocates and mainstream media, adding to the immense pain of the parents and relatives of the victims.
InfoWars holding company, InfoW LLC, and two other media assets owned by Jones filed for Chapter 11 on April 17 after Jones and his media companies were found liable in multiple defamation lawsuits brought in Texas and Connecticut by families of the shooting victims.
An attorney for the Connecticut families, Chris Mattei, in an email said the bankruptcy has been a "sham from (the) beginning, orchestrated by Mr. Jones to delay accountability before a jury." Mattei said the families looked forward to seeing their case returned to Connecticut Superior Court for the trial on damages they deserve.
The families in late March had rejected Jones' offer to settle their defamation lawsuits. He offered $120,000 to each of the 13 plaintiffs, which they rejected as a "desperate attempt" to escape accountability for his "deceitful, profit-driven campaign" against the Sandy Hook families.
An attorney for Jones could not immediately be reached for comment.
The bankruptcy should continue even if the Sandy Hook plaintiffs remove themselves from the case so that the companies can resolve other debts, Lee said.