In addition to denying the proposed deal, a federal judge told the Chapter 7 trustee that he was no longer authorized to sell Infowars' assets.

Two sets of family members of victims killed in the Sandy Hook Elementary School shooting claimed Jones spread lies on his platform that the mass shooting was a hoax. Jones was on the losing side of judgments totaling more than $1 billion.

The ruling by a U.S. bankruptcy judge in Houston further complicates how and when Jones' bankruptcy case will be resolved and when the families he defamed will be paid.

The judge also shut down the future sale of Infowars' assets, leaving the trustee authorized to sell only the company’s equity.

A U.S. bankruptcy judge on Wednesday blocked a settlement between families who have sued Alex Jones over his false claims about the 2012 Sandy Hook Elementary School mass shooting, saying their attempt to divide the bankrupt conspiracy theorist's assets exceeded his court’s authority.