Far-right Gateway Pundit sought bankruptcy protection in ‘bad faith’ to avoid 2020 defamation suits, judge rules

By Marshall Cohen, CNN

Washington (CNN) — A federal judge threw out a bankruptcy case filed by The Gateway Pundit, finding that the far-right conspiracy site was seeking bankruptcy protections in “bad faith” to avoid costly defamation lawsuits stemming from its publication of 2020 election lies.

The ruling Wednesday from US bankruptcy judge Mindy Mora means the defamation cases will move forward. Two Georgia election workers and a former Dominion Voting Systems executive sued the outlet over its false claims that they rigged the 2020 results.

The Gateway Pundit denies wrongdoing and said those cases forced them into bankruptcy, but the judge concluded it was trying to exploit the bankruptcy system in “bad faith.”

The Gateway Pundit “remains both balance sheet and cash flow solvent,” Mora wrote in her ruling. “There is no present financial distress, no looming foreclosure sale, no prospect of a market crash. There is only the [defamation cases] in which [The Gateway Pundit] must defend itself. That’s not a basis for bankruptcy relief; it’s the justice system in operation.”

Lawyers for The Gateway Pundit did not immediately respond to a CNN request for comment.

The immediate impact of the ruling means two major defamation cases against the fringe website and its founder Jim Hoft can move forward in Missouri and Colorado state courts.

According to court filings, the Gateway Pundit has drained $700,000 of its $2 million defamation insurance policy, and only has between $500,000 and $1 million in assets – putting it on perilous footing if it were to face a large damages award in either of the pending lawsuits.

Brittany Williams, a lawyer from Protect Democracy representing the Georgia election workers, Ruby Freeman and Shaye Moss, said the judge “saw through The Gateway Pundit’s transparent attempt to abuse the bankruptcy process to avoid accountability.”

“We will continue to work to ensure that no abuse of the legal system further delays justice for Ms. Freeman and Ms. Moss,” Williams said in a statement Thursday.

Charlie Cain, a lawyer for former Dominion executive Eric Coomer, who is suing The Gateway Pundit, said his client “has seen more than enough of Jim Hoft’s delay strategy” and is eager to “proceed to trial in Colorado, hopefully sooner rather than later.” (After the 2020 election, a Gateway Pundit article called Coomer an “unhinged sociopath,” and the site also published his home address.)

Over the years, The Gateway Pundit has become infamous for its publishing of hyper-partisan blog posts, many of which advance dangerous lies and conspiracy theories. Hoft, a supporter of former President Donald Trump and MAGA loyalist, has used the website to promote the former president, while disparaging his opponents.

The Gateway Pundit is one of several right-wing media outlets grappling with the fallout stemming from its promotion of 2020 election lies. Fox News paid a record $787 million to settle a massive defamation lawsuit brought by Dominion Voting Systems, an election technology company. And the right-wing network still faces a similar lawsuit from Smartmatic, another election company.

Additional lawsuits from Dominion and Smartmatic are progressing in the courts against Trump allies, including his former lawyers Rudy Giuliani and Sidney Powell and conspiracy theorists Mike Lindell and Patrick Byrne, who all supported Trump’s attempts to overturn the 2020 election.

Meanwhile, the far-right channel One America News settled a lawsuit with Smartmatic earlier this year. And the right-wing cable outlet Newsmax faces lawsuits from both Smartmatic and Dominion, with the Smartmatic case scheduled to go to trial in September.

The Gateway Pundit’s three-month journey in bankruptcy court revealed previously confidential details about the inner workings and financial stability of the conspiracy-peddling website.

“Publication of sensational stories has generated healthy revenues” for the outlet, Mora, the bankruptcy judge, wrote in her ruling, noting that the company made $3.1 million in gross revenue last year and $2.8 million in 2022.

The Gateway Pundit’s “only employee” is Hoft, though his husband and brother are both paid for contract work and marketing services, according to the ruling. The company also has some “eye-catching” assets that it wasn’t offering to liquidate, including a 2021 Porsche Cayenne that Hoft drives while living in St. Louis, and a condo in Jensen Beach, Florida.

Freeman, Moss and Coomer opposed the bankruptcy plan, which the judge said “looks a lot like bad faith” because it would have capped their potential payouts from the defamation lawsuits at three years of The Gateway Pundit’s net income. That is likely significantly smaller than what Freeman, Moss and Coomer could be awarded if they win their lawsuits. Giuliani, for instance, was ordered to pay $148 million in damages to Freeman and Moss for peddling similar lies about their role in the 2020 election. (A separate judge recently dismissed Giuliani’s bankruptcy case, after he sought similar protections.)

“Bankruptcy relief is intended to foster equitable goals, not provide a Monopoly-style ‘get out of jail free’ card,” Mora wrote.

CNN’s Oliver Darcy and Tierney Sneed contributed reporting.

The-CNN-Wire
™ & © 2024 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.