Free Speech Systems LLC filed for bankruptcy on Friday as Mr Jones, its founder, and the company could face as much as $150m in damages in the trial over the lies pushed by Mr Jones concerning the 2012 Sandy Hook elementary school shooting in Newtown, Connecticut.
Free Speech Systems LLC filing for bankruptcy would usually lead to the end of the trial, which is taking place in Austin, Texas, but according to a court filing, the company is planning to request a bankruptcy judge to let the trial continue.
The company is hoping that an emergency hearing will be held on Monday, according to Reuters.
Mr Jones and the company could try to use the bankruptcy case to restrain the amount of the damages awarded by a jury.
Three other InfoWars entities suggested $10m to end the case in April, far below any amount put forward by the families of the Sandy Hook victims.
That proposal also added protections from the lawsuits for Mr Jones and his company.
Those three entities, InfoW, IW Health and Prison Planet, have already declared bankruptcy and voluntarily ceased their litigation last month when the Sandy Hook families removed them as defendants in the defamation case.
Last year, Mr Jones was found liable in the lawsuits launched by the Sandy Hook families following his false claims that the school shooting was faked.
Those judgements came after Mr Jones went against orders from the court and refused to hand over documents related to the case.
The cases have since been prepped for trials to decide on the damages. The first one has started in Austin.
Mr Jones has claimed that the shooting – in which 26 people were killed, 20 children and six members of staff – was faked by those pushing for stricter gun control measures, aided by the press.
He has since admitted that the massacre did occur.
The restructuring advisor for Free Speech Systems, Marc Schwartz, said in a court filing that it’s in the interest of the company to carry on with the ongoing trial to determine damages because large amounts of money have been spent by both parties.
The Sandy Hook families said the bankruptcy filing in April was a “sinister” attempt to protect Mr Jones’ assets from liability.
Concerning the most recent bankruptcy filing, Mr Schwartz said that the legal case related to Sandy Hook led to InfoWars being closed out from large internet, social media, and financial institutions and that its business declined because of it.
Attorney Mark Bankston represents the Sandy Hook families. He texted Reuters, saying “our clients are pleased that despite the bankruptcy, their trial will continue and that the jury will return a verdict”.
“Now, InfoWars is heading directly for its long-awaited, reckoning”, he added.