Infowars is jettisoning its bankruptcy case after families of Sandy Hook school shooting victims who are suing the conspiracy site’s founder, Alex Jones, withdrew from the chapter 11 process.

The outcome described in court papers filed this week is the culmination of a failed legal strategy initiated by Infowars in April that attempted to tap the power of chapter 11 to settle defamation lawsuits that Mr. Jones’s lawyers have said threaten him with financial ruin.

Lawyers for Sandy Hook families accused Mr. Jones and his businesses of attempting to abuse the bankruptcy system and said they look forward to resuming litigation against him in state courts in Connecticut and Texas.

The bankruptcy filing threatened the Sandy Hook families with a potentially lengthy delay to their defamation suits against Mr. Jones even though he didn’t file personal bankruptcy. To resume litigation against Mr. Jones, the families agreed last month to drop legal claims against the Infowars properties that were put into chapter 11.

Properties holding the trademark and web-domain rights to Infowars agreed Wednesday to dismiss their chapter 11 cases. W. Marc Shwartz, a certified public accountant who was retained as Infowars’s chief restructuring officer, determined it was in the best interest of the site and its creditors to end the bankruptcy in light of Sandy Hook families’ decision to effectively withdraw from the chapter 11 process, according to papers filed in the U.S. Bankruptcy Court in Victoria, Texas.

The families of the children murdered in the Sandy Hook massacre sued Mr. Jones in 2018 for repeatedly saying the school shooting, which killed 20 first-graders and six adults in Newtown, Conn., was a hoax and falsely claiming the families were actors and faked the deaths of their loved ones.

Lawyers representing some families who have sued Mr. Jones have said that the bankruptcy was part of a last-ditch effort to avoid a Texas trial to establish damages against him. A separate damages trial in Connecticut state court is scheduled for September.

Mr. Jones was found liable by default in September and November by courts in Texas and Connecticut, respectively, as penalties for failing to comply with court-ordered discovery for documents and information.

The move to end the chapter 11 case “proves what we’ve said from the beginning: This bankruptcy was a sham attempt by Alex Jones to pit families against one another and avoid his reckoning with a jury,” said Chris Mattei,

a lawyer representing Sandy Hook families who have sued Mr. Jones in Connecticut.

“It didn’t work. We look forward to trial,” Mr. Mattei said.

If approved by a bankruptcy judge, dismissal of Infowars’s cases would bring the chapter 11 to an end a little more than two months after it began.

An Infowars lawyer has said the chapter 11 was filed in good faith and said during a court hearing in May that they intended to move forward with the bankruptcy to address creditors not involved in the Sandy Hook litigation.

In a Thursday court filing, Infowars’s lawyer said the Infowars properties sought to dismiss their chapter 11 cases after the Sandy Hook plaintiffs withdrew from the bankruptcy because they still faced a costly legal fight with the Justice Department’s bankruptcy watchdog, which questioned the basis for the bankruptcy.

Infowars said in court papers that it proposed providing up to $10 million through a bankruptcy plan to resolve the Sandy Hook litigation and avoid lengthy jury trials and appeals. However, the U.S. Trustee, a Justice Department unit overseeing bankruptcy courts, had problems with the fact that Mr. Jones could have benefited from that plan even though he didn’t file personal bankruptcy, Thursday’s court filing said.

Lawyers representing Infowars and Mr. Jones didn’t return a message seeking comment.

Write to Jonathan Randles at Jonathan.Randles@wsj.com