Bankruptcy filing complicates defamation cases against Gateway Pundit

By Paul Wagman

The bankruptcy filing last week by TGP Communications LLC, the company that does business as Gateway Pundit, is at the very least another handful of sand thrown into the gears of the two defamation cases against the far-right conspiracy-minded web site.

At a minimum, the filing will give Jim Hoft, the St. Louisan who owns and publishes the influential website, a means of complicating and possibly delaying any consequences for his alleged smears of three innocent people, smears that resulted in death threats and other traumatic harassment. 

But in a best-case scenario for Hoft, the filing could end up greatly limiting any damages he may eventually have to pay and enable him to retain control of his company.  

The “complicate and delay” part of the bankruptcy strategy is already playing out, it appears. The defamation case filed against TGP in St. Louis Circuit Court in December 2021, a case that has been painfully grinding its way toward a trial now set for March 2025, was promptly halted through an automatic, court-ordered “stay.” The defamation claims against the other defendants in the case — Hoft personally and his identical twin brother Joe personally as well – can still technically proceed. But the TGP bankruptcy makes the process messier and more difficult.  

The automatic stay may not last, however. “The question is whether the stay turns out to be temporary or a more lasting stoppage,” said a prominent bankruptcy attorney here who asked not to be named.

The plaintiffs in the St. Louis defamation case are Ruby Freeman and “Shaye” Moss, two Georgia poll workers whom Hoft and others repeatedly accused of ballot tampering as they tallied votes in Atlanta in the 2020 presidential election. Matt Ampleman, a lawyer with the Dowd Bennett firm in St. Louis who represents Freeman and Moss, declined to comment. 

Last December, a jury in Washington, D.C. ordered Rudy Giuliani, the former New York Mayor and lawyer for former President Donald Trump, to pay the two women $148 million for his role in spreading the same lies about the pair. The judgment hardly augured well for Hoft’s chances here, and perhaps especially not after Giuliani’s lawyer contended that Gateway Pundit – whom he called “patient zero” – was more responsible than his client for the lies.  

Meanwhile, Hoft faces a separate case in Denver. In that suit, Eric Coomer, the former Director of Product Security and Strategy for Dominion Voting Systems, accuses him and TGP and others of recklessly spreading dubious and unverifiable claims that he conspired with Antifa activists to switch votes to Joe Biden. The other defendants in the case include the Trump Campaign itself and Sidney Powell, a Trump lawyer. 

The case in Denver was filed in December 2020, and, in the face of multiple delays, has yet to be set for trial. But just this past April 11 Coomer won an important victory when the Colorado Appeals Court ruled against a motion by Hoft and the other defendants to dismiss the case on “anti-SLAPP” grounds.  SLAPP stands for “strategic lawsuit against public participation.” Anti-SLAPP laws allow defendants to seek dismissal of claims if they can show they are meritless and designed to punish parties for constitutionally protected activities, such as free speech or the right to petition. Hoft also tried to get the St. Louis case dismissed on anti-SLAPP grounds, but a judge rejected that effort last summer. 

The defendants in Colorado can still appeal to the state’s Supreme Court, but the recent Colorado ruling may help explain the timing of the April 24 bankruptcy petition, one legal observer said.  Another possible trigger, it appears, may have been a docket entry in the St. Louis case on the very day the bankruptcy petition was entered. The entry noted that attorneys for Freeman and Moss had finally scheduled depositions for both Jim and Joe Hoft.  

The date for the depositions is not public information, but their being scheduled clearly suggested significant looming legal bills for Hoft’s company, said Wendi Alper=Pressman, a bankruptcy attorney at Armstrong Teasdale in St. Louis. 

Hoft himself blamed the cases against him in a statement he posted April 24 on the Gateway Pundit website. The filing resulted from “the progressive liberal lawfare attacks against our media outlet,” he wrote.

The specific timing aside, the fact of the bankruptcy filing was not surprising, bankruptcy attorneys said. “I think this could have been expected,” said a prominent St. Louis bankruptcy attorney who asked not to be named. 

The choice of the Sunshine State as the site for the filing, however, did puzzle some legal observers. Hoft not only lives in St. Louis but operates his website out of his home. But when TGP filed for Chapter 11, it reported Florida – where the company had applied to do business only six days earlier – as its “Principal place of business.” Specifically, the company cited an address in Jenson Beach. The address belongs to a Mailbox Plus store, which offers packing and shipping services similar to a UPS store.  

In fact, however, there appears to be little mystery as to the choice of Jensen Beach, an unincorporated community on the Atlantic coast 28 miles north of Jupiter, where the St. Louis Cardinals do their spring training.  Hoft’s brother Joe, who contributes articles to Gateway Pundit and as noted earlier, is also a defendant in the suit in St. Louis, has a residence there, according to court filings.  And between blue St. Louis and red Florida, Hoft’s attorneys probably thought a little “venue-shopping” might benefit them, attorneys said. 

Hoft is represented by a team of attorneys that includes John Christian Burns, of St. Louis, and Marc Randazza, of Las Vegas. The lawyer who signed the bankruptcy filing in Florida is Bart Alan Houston. A Google search reveals that Houton was suspended from the practice of law for 30 days in 2016 by the Supreme Court of Florida after the Florida Bar filed a complaint against him  in connection with a 2012 bankruptcy case.   

That aside another noteworthy wrinkle about the bankruptcy petition is its filing under subchapter V of the Chapter 11 Bankruptcy law, attorneys said.  Subchapter V is a four-year old innovation that was designed to make it easier for small businesses to make their way through bankruptcy by, among other things, “allow(ing) for greater flexibility in negotiating restricting plans with creditors,” according to the Department of Justice. Provisions in the subchapter establish the possibility that the creditors of TGP Communications – including, possibly, the plaintiffs in the two defamation suits – will get only pennies on the dollar when the “pie” is split up, said Alper-Pressman.  That’s because under the subchapter, as opposed to a standard Chapter 11 bankruptcy, a plan can be confirmed over the objections of its creditors.    

If a plan is confirmed under subchapter V, Alper-Pressman said, it might allow Hoft to retain ownership of his company even without the creditors’ approval of even fractional payments, let alone full payment. Instead, Hoft would only have to pay them the greater of the liquidation value of the company’s assets or three to five years’ worth of net income — and then continue as owner of the no-long-bankrupt company.  Meanwhile, the plaintiffs in the defamation cases would get paid from this pool of money like any other creditor. Their potential payout would almost certainly end up being far below what they might have received had any judgments for them not been wrapped into the subchapter V resolution.

In any event, it should be noted that Hoft will pay a price in privacy for having filed bankruptcy. The bankruptcy laws require TGP to disclose detailed financial information, such as its revenue for each of the past three years and what it paid Hoft in the past year.  

And meanwhile, the attorneys for the plaintiffs in St. Louis and Denver are by no means without the ability to counter, Alper-Pressman said. One option is to ask the bankruptcy court in Florida to lift any automatic stay and allow the defamation cases to proceed. Another might be to remove – “sever,” in legalese — TGP Communications from their cases and proceed against Hoft personally. The plaintiffs could also ask the Florida bankruptcy judge to transfer the bankruptcy case to the St. Louis bankruptcy court. 

Alper-Pressman said she and other bankruptcy attorneys will also be watching what happens to Alex Jones, the conspiracy-monger who got slammed with more than $1 billion in judgments after denying the murders at Sandy Hook Elementary School. Jones also used subchapter V for his filing of bankruptcy for his company, Free Speech Systems, LLC.  Later he filed separately, outside subchapter V, for personal bankruptcy.   

Last October, a U.S. Bankruptcy Court judge for the Southern District of Texas ruled that the bankruptcy laws don’t shield Jones from having to make full payments to the Sandy Hook families.  The judge said that was because the Sandy Hook debts stemmed from intentional and malicious conduct.

If the plaintiffs in St. Louis and Denver are ever to have a chance of collecting big judgments against Hoft, one attorney here said, a similar finding might be necessary.

Paul Wagman is a former Post-Dispatch reporter and FleishmanHillard executive who is now an independent reporter, editor and communications consultant.

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