WSJ: This Judge Made Houston the Top Bankruptcy Court. Then He Helped His Girlfriend Cash In.
I know it's behind a paywall so some quotes.....
I know it's behind a paywall so some quotes.....
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The letter alleged that U.S. Bankruptcy Judge David R. Jones, chief of the bankruptcy court in Houston, was in a romantic relationship with Elizabeth Freeman, a Texas attorney who as Kirkland's co-counsel helped the firm shepherd multibillion-dollar cases in Jones's courtroom.
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Jones became the nation's busiest bankruptcy judge after Kirkland, the top U.S. firm for advising financially-troubled companies, steered most of its largest chapter 11 cases to his court.
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Before Jones took the bench in 2011, most large corporate bankruptcies were filed either in New York or Delaware.
Jones set out to change that. After he became chief judge in 2015, Jones enacted rules that assigned the biggest chapter 11 cases to either himself or Isgur, who had been his mentor in private practice.
Jones contacted Kirkland's top bankruptcy partners at the time, Jamie Sprayregen and Paul Basta. In December 2015, Sprayregen and Basta stopped by Jones's chambers in Houston to meet with the judge, people familiar with the meeting said. A Kirkland representative described it as a brief meet-and-greet.
The following year, low oil prices pushed many Texas oil drillers to insolvency, and Kirkland began filing large energy-related bankruptcies in Houston. Later, when Covid-19 lockdowns triggered a rash of corporate defaults, Kirkland filed cases there for department-store chains JCPenney and Neiman Marcus.
Kirkland brought in Jackson Walker as co-counsel for most of its Houston cases, including clients from out of state.
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Months later, Van Deelen found the evidence he wanted on a website that searches public records for personal information. "All I had for proof was that anonymous letter," he said. "Then I asked TruthFinder." He learned from property records on the Harris County website that Jones and Freeman had bought a home together in Houston in 2017 and still owned it.
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Armed with that information, Van Deelen filed a lawsuit against Jones in October. This time, he included the property records with the anonymous letter. In an interview with The Wall Street Journal shortly after, Jones confirmed the relationship.
The Fifth Circuit Court of Appeals was alerted and initiated an investigation against Jones. After a little more than a week, the court's chief judge said she found probable cause that Jones had committed misconduct regarding his intimate relationship with Freeman. Jones resigned days later.
A Kirkland representative said the firm and its lawyers didn't know Jones had a relationship with Freeman until it became public last October.
Following Jones's departure, a civil division of the Justice Department filed a series of motions challenging roughly $13 million in fees that Jackson Walker had billed and which were approved by Jones. That included more than $1 million billed by Freeman in 17 cases, court filings show. During the time Jones was approving Freeman's fees, she paid property taxes on the house they owned together.
The Justice Department said the bankruptcy system was "significantly compromised" by the Jones-Freeman relationship in at least 26 chapter 11 cases involving Jackson Walker. Kirkland was co-counsel in most of those cases.
