Sandy Hook family suffers major blow in their attempt to collect on $50M owed by conspiracy theorist Alex Jones for saying mass school shooting was a hoax

The parents of a child killed in the Sandy Hook massacre suffered a major blow in their attempt to collect on some of the $50million they won in a lawsuit against conspiracy theorist Alex Jones over his false claims that the shooting was a hoax.

Attorneys for Scarlett Lewis and Neil Heslin, whose 6-year-old son Jesse Lewis died in the 2012 Connecticut shooting, obtained an order from a state judge in Texas earlier this month allowing them to begin collecting some of the assets from Jones' company, Infowars' parent company, Free Speech Systems.

That order came just hours after federal Bankruptcy Judge Christopher Lopez dismissed the company's bankruptcy claim.

But Lopez said in court on Thursday that the state judge's ruling conflicts with federal bankruptcy law - as eight other families of Sandy Hook victims await the money from their $1.4billion verdict while Jones appeals the case.

'I don’t think the state court was actually informed of all these issues,' the judge said.

He ruled on Thursday that a newly appointed federal trustee assigned to oversee the liquidation of Jones' personal assets now has control over Jones' ownership of Free Speech Systems.

Lopez then said the trustee, Christopher Murray, has the sole authority to sell off the company's assets and distribute the proceeds equally among all of Jones' creditors.

'There will be no attempt, and you are under no obligation to turn over the bank account or access to the bank account,' Lopez told Murray, the News-Times reports.

Mark Bankston, a lawyer representing Lewis and Heslin, slammed the decision in a statement on Thursday.    

'Our clients are frustrated that they will not be allowed to pursue their state court rights after all,' he said. 

'Apparently this case will remain in limbo much to Mr. Jones’ delight while the other group of plaintiffs insist they are entitled to nearly all the recovery.'

Lewis and Heslin, who now live in Texas, have been at odds with the relatives of the other young victims in Connecticut over how Jones' bankruptcies should end and how his assets should be sold off.

They had tried to seize his business accounts almost immediately after Lopez denied the bankruptcy claim and converted Jones' personal bankruptcy reorganization case into a liquidation - meaning that many of his assets will be sold off to pay creditors. 

Lawyers for Lewis and Heslin said the dismissal of Free Speech System’s case meant they could go back to the Texas state court in Austin and ask a judge to order the company to begin turning over money and other assets to Lewis and Heslin. 

But Trustee Murray filed an emergency motion asking the judge to halt their collection of the funds in state court - arguing that it would interfere with the shut down and liquidation of Jones' company.

He wrote that it 'threatens to throw the business into chaos, potentially stopping it in its tracks,' and asked Lopez to pause Texas' action while he works on 'an orderly wind down' of Free Speech Systems' operations, the New York Times reports.

The families of the eight victims who sued Jones in Connecticut had also filed an emergency motion asking Lopez to block Texas' ruling.

They argued it would lead to a 'race' between Sandy Hook families to the state courts in Texas and Connecticut to see who could get Jones’ assets first, as attorneys on both sides claim the other are trying to get a disproportionate share of Jones' assets.

The Connecticut attorneys say the size of their client's jury award entitles them to a greater share of Jones' assets - and wrote in the emergency filing they 'hold more than 95 percent of liquidated claims.'

But those families are barred from seeking any assets through the state courts while Jones appeals the judgments in the state courts, arguing he had a First Amendment right to make his claims.

Attorneys for the Texas family, however, have argued that the assets Jones had should be distributed equally among all the families.

Last week, Mark Bankston, a lawyer representing Lewis and Heslin, even claimed that Connecticut lawyers rebuffed his team's offer to share any money recovered through the state courts equally.

'The attorneys for the Connecticut plaintiffs have consistently refused an equitable distribution,' he claimed, according to the Times.

'They insist, despite the exceedingly small pool of recovery they caused to happen, that they are entitled to nearly all amounts collected from Jones.' 

But in a statement following Lopez's ruling on Thursday, Chris Mattei, an attorney for the Connecticut families, said they 'have always sought a fair and equitable distribution of Free Speech System's assets for all of the families, and today's decision sets us back on that path.

'We are pleased that the bankruptcy court instructed the Chapter 7 trustee not to turn over FSS property or bank accounts to any party at this time.'  

Bankston, meanwhile, said his clients 'are frustrated that they will not be allowed to pursue their state court rights after all.

 'Apparently this case will remain in limbo, all while one group of plaintiffs refuses to have all the plaintiffs treated equally.'

Fueling the race for the funds is the discovery through bankruptcy filings that Jones' fortune is worth less than what the families had believed.

Jones currently only has about $9million in personal assets, according to the most recent financial filings, while Free Speech Systems has about $6million in cash on hand and about $1.2million worth of inventory, according to court testimony.

If the money were divided equally among the families, each would receive less than $500,000 each.

That figure could shrink even more because Jones would still have to pay his legal bills and taxes.

The families are therefore now hoping there is more money from Free Speech Systems. 

In the meantime, Trustee Murray plans to shut down Infowars - Jones'multimillion dollar conspiracy theory website, and use the assets to help pay the families he disparaged by claiming the shooting that took the lives of 20 first graders and six educators was 'completely fake with actors.'

The relatives have said they were traumatized by Jones’ hoax conspiracies and his followers’ actions, claiming they were harassed and threatened by Jones' listeners.

Some of the families said the conspiracy theorists even confronted them in person saying that the shooting never happened and their children never existed. 

One parent also said someone threatened to dig up his dead son’s grave.

Jones now says he believes the shooting happened, but insists he had a free speech right to make the claims.

He also said on his show Thursday that although Infowars may no longer exist in two to three months, he will restart his broadcast on another platform he will build.