Marc Schwartz testified that he signed on to take the position of Chief Restructuring Officer of the company in June and now controls all bank accounts, payroll and hiring decisions. Schwartz testified that Jones withdrew about $62 million from the company over 14 years and testified that $30 million of those withdrawals was paid to the IRS.
Schwartz also testified during the hearing, which lasted more than six hours, that Infowars had received approximately $9 million in crypto donations and that “they went to see Mr. Jones in person.”
Schwartz said in his testimony that the Free Language System should be allowed to use the cash it has on hand to be able to pay suppliers, saying otherwise it would have to shut down.
“If we can’t pay our key suppliers, we close,” says Schwartz. “The company is currently in a situation where there’s not much room to breathe.”
U.S. bankruptcy judge Christopher Lopez on Wednesday said he would not allow more withdrawals in the future, and he found some of Schwartz’s testimony “troublesome.”
Court documents filed Friday as part of Free Speech Systems’ bankruptcy show the company has estimated assets of $10 million to $50 million and estimated debt of $50 million to $100 million . An attorney for Free Language Systems said at Wednesday’s hearing that the company has about $1.3 million in cash on hand.
Schwartz emphasizes the importance of being able to pay vendors to allow the company to broadcast and sell products online.
“If we can’t broadcast, we can’t sell,” Schwartz said.
Schwartz testified that the management structure of the Free Language System was not set up the way a successful business should be managed.
“There was Alex and then everyone else,” Schwartz testified.
Schwartz said the accounting controls, as far as he could tell after taking control of the company, “did not exist,” that the people responsible for maintaining the company’s books did not have an accounting degree. and no financial statements were prepared for at least 18 months when he took over.
Attorneys reviewing Jones’ salary under the bankruptcy plan, said documents show Jones’ salary before bankruptcy was $625,000 a year and under the restructuring plan it would amount to about $1 ,3 million dollars. Schwartz said Jones’ salary could be considered reasonable because of his value to the company.
“Who is more valuable? Nobody,” Schwartz said. Lopez authorized a lower salary for Jones to be paid, about $20,000 per week.
When asked how much the company had spent on legal costs related to the Sandy Hook lawsuit, Schwartz said company records show at least $4.5 million was spent between 2018 and 2021, but he doesn’t believe that number is correct.
Schwartz also testified that Jones had used the company-affiliated American Express card to pay for personal expenses, including housekeeping, regularly over the past 18 months. The card has a $300,000 a month fee, but Schwartz said the accountant didn’t specify what that fee was.
“We can’t tell you if it’s the power, entertainment or electronics supply for the factory,” says Schwartz.
Lopez said he would not authorize payment of an existing American Express bill of about $172,000.
Schwartz said he didn’t know who Jones was before he was hired and that he disagrees with many of Jones’ views, but still consults him from time to time on business-related matters.
Three smaller companies linked to Jones declared bankruptcy earlier this year, briefly halting lawsuits against Jones. But the families suing him removed those companies from their lawsuits so lawsuits could continue against Jones and the Free Speech System. Soon after, the companies came out of bankruptcy protection.