A Houston bankruptcy judge accused U.S. law firm Jackson Walker of breaching its ethical duties by failing to disclose earlier the relationship between David Jones, a former Houston bankruptcy judge, and one of its partners.
U.S. Bankruptcy Judge Marvin Isgur referred the entire Jackson Walker firm for disciplinary proceedings in a letter sent Friday to the chief judge of the U.S. District Court for the Southern District of Texas.
Jackson Walker admitted that it knew about the relationship between its former bankruptcy partner, Elizabeth Freeman, and Jones in March 2022 but chose not to inform anyone, Isgur noted in the letter. Instead, the firm billed $11 million in fees for cases where Jones acted as judge or mediator without revealing the relationship, Isgur stated. He criticized the firm for its inaction, saying, “Jackson Walker did nothing to inform the court. I reject the notion that Jackson Walker had no duty to disclose the relationship simply because Judge Jones, as a member of the court, was already aware.”
A spokesperson for Jackson Walker declined to comment on Monday.
Jones, once the busiest bankruptcy judge in the U.S., handled the bankruptcies of JCPenney, Neiman Marcus, Party City, and Chesapeake Energy, among others. He resigned from the bench last October after admitting to living with Freeman. Since his resignation, the U.S. Trustee, the Justice Department’s bankruptcy watchdog, has been seeking to recover millions in legal fees that Jones approved in at least 35 bankruptcy cases filed by Jackson Walker.
Isgur announced on Friday that he would recuse himself from overseeing the disputes, stating, “It would be inappropriate for me to refer a matter for disciplinary action and then rule on relief in a bankruptcy case based on the same findings and conclusions.”
A spokesperson for the U.S. Trustee did not respond immediately to a request for comment.
During a hearing last month, Jones confirmed that he was under criminal investigation. He also faced sanctions last month for offering testimony outside the court’s supervision.
