Sandy Hook lawyers to Alex Jones: liquidate or pay up

Sandy Hook families who won in legal judgments against US conspiracy theorist Alex Jones for calling the 2012 Connecticut school shooting a hoax have offered to settle that debt.

The offer would be for only pennies on the dollar — at least $US85 million ($A129 million) over 10 years.

It was made in Jones' personal bankruptcy case in Houston last week. In a legal filing, lawyers for the families said they believed the proposal was a viable way to help resolve the bankruptcy reorganisation cases of both Jones and his company, Free Speech Systems.

But in the sharply worded document, the lawyers continued to accuse the Infowars host of failing to curb his personal spending and “extravagant lifestyle,” failing to preserve the value of his holdings, refusing to sell assets and failing to produce certain financial documents.

“Jones has failed in every way to serve as the fiduciary mandated by the Bankruptcy Code in exchange for the breathing spell he has enjoyed for almost a year. His time is up,” lawyers for the Sandy Hook families wrote.

The families' lawyers offered Jones two options: either liquidate his estate and give the proceeds to creditors, or pay them at least $US8.5 million ($A12.9 million) a year for 10 years — plus 50 per cent of any income over $US9 million ($A14 million) per year.

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During a court hearing in Houston, Jones' personal bankruptcy lawyer, Vickie Driver, suggested Monday that the $US85 million ($A129 million), 10-year settlement offer was too high and unrealistic for Jones to pay.

“There are no financials that will ever show that Mr. Jones ever made that … in 10 years,” she said.

In a new bankruptcy plan filed on November 18, Free Speech Systems said it could afford to pay creditors about $US4 million ($A6.1 million) a year, down from an estimate earlier this year of $US7 million ($A11 million) to $US10 million ($A15 million) annually.

The company said it expected to make about $US19.2 million ($A29.1 million) next year from selling the dietary supplements, clothing and other merchandise Jones promotes on his shows, while operating expenses including salaries would total about $US14.3 million ($A21.7 million).

Personally, Jones listed about $US13 million ($A20 million) in total assets in his most recent financial statements filed with the bankruptcy court, including about $US856,000 ($A1.3 million) in various bank accounts.

Under the bankruptcy case orders, Jones had been receiving a salary of $US20,000 ($A30,305) every two weeks, or $US520,000 ($A788,000) a year. But this month, a court-appointed restructuring officer upped Jones' pay to about $US57,700 ($A87,339) biweekly, or $US1.5 million ($A2.3 million) a year, saying he has been “grossly” underpaid for how vital he is to the media company.

Bankruptcy Judge Christopher Lopez on Monday rejected the $US1.5 million ($A2.3 million) salary, saying the pay raise didn't appear to have been made properly under bankruptcy laws and a hearing needed to be held.

If Jones doesn't accept the families' offer, Lopez would determine how much he would pay the families and other creditors.

After 20 children and six educators were killed by a gunman at Sandy Hook Elementary School in Newtown, Connecticut in 2012, Jones repeatedly said on his show that the shooting never happened and was staged in an effort to tighten gun laws.

Relatives, of many but not all, of the Sandy Hook victims sued Jones in Connecticut and Texas, winning nearly $US1.5 billion ($A2.3 billion) in judgments against him. In October, Lopez ruled that Jones could not use bankruptcy protection to avoid paying more than $US1.1 billion ($A1.7 billon) of that debt.

Relatives of the school shooting victims testified at the trials about being harassed and threatened by Jones' believers, who sent threats and even confronted the grieving families in person, accusing them of being “crisis actors” whose children never existed.

Jones is appealing the judgments, saying he didn't get fair trials and his speech was protected by the First Amendment.