The romance between David R. Jones and Elizabeth Freeman induced fairly the stir in authorized circles. The pairing isn’t per se noteworthy, however when a federal chapter decide will get along with a chapter accomplice of a significant legislation agency and continues to listen to instances involving that accomplice/legislation agency, nicely, that type of moral lapse will set tongues a-wagging. Within the quick aftermath of the romantic entanglement turning into public, Judge Jones resigned his place on the US Chapter Courtroom for the Southern District of Texas, ending the ethics inquiry that the Fifth Circuit opened on the decide. Freeman is not at Jackson Walker, however the agency continues to be coping with the aftermath.
The agency acquired charges in 26 Chapter 11 instances in entrance of Jones that Freeman labored on. The agency — which says it didn’t learn about Freeman’s relationship till 2021, at which era she was instructed to not invoice to any issues earlier than Jones — didn’t disclose the entanglement between the decide and their then-partner in these instances, placing $13 million in charges in danger.
As reported by Bloomberg Legislation, this could possibly be very unhealthy for the agency:
However Jackson Walker and others within the coming months face extra accusations that they harmed collectors and others concerned in a number of instances overseen or mediated by Jones and that they jeopardized the integrity of the nation’s chapter system by failing to stick to authorized disclosure necessities.
“I’m undecided the ball has stopped rolling but,” stated Northwestern Pritzker College of Legislation professor and former Nevada chapter decide Bruce Markell. All of it activates “who knew what, when,” he stated.
The lawsuits from collectors alleging they received a bum deal in entrance of Decide Jones are already rolling — in truth, it was one such lawsuit that brought the relationship to light. Plus the Justice Division’s chapter oversight program, US Trustee, has gotten concerned, making an attempt to revive religion in a system whose repute has been badly broken by the scandal.
It’s filed quite a few chapter courtroom requests to disgorge charges that the agency earned in dozens of instances presided over by Jones from 2018 to 2022 whereas Freeman was an lawyer on the agency. However the course of is convoluted and stays within the early phases.
In some cases, trials are set. Decide Marvin Isgur of the US Chapter Courtroom for the Southern District of Texas in August will hear Jackson Walker charge disputes within the instances of Neiman Marcus, Seadrill Companions, and Strike LLC.
However many others stay in flux. The truth that a number of months have handed and it’s nonetheless undetermined which courtroom will likely be dealing with sure issues “is most unlucky for individuals who care concerning the public confidence within the chapter course of and the chapter system,” stated [Clifford White, former director of the US Trustee Program].
However making an attempt to untangle this specific net has been notably difficult. Among the charges US Trustee is making an attempt to disgorge are from instances which are closed — typically years in the past. Complicated is an understatement.
The executive burden of reviving bankruptcies that, in some instances, had been way back accomplished, has even induced confusion for Decide Christopher Lopez, who’s tasked with overseeing a number of the US Trustee’s charge disgorgement requests.
“I didn’t know these instances had been closed,” Lopez stated at a March 21 chapter courtroom listening to relating to a subset of the instances assigned to him months in the past.
The reality is, we don’t even know what different ramifications are on the horizon for these wrapped up within the scandal. Nancy Rapoport, a College of Nevada, Las Vegas legislation professor, instructed Bloomberg, “We don’t even know the opposite footwear which are going to drop. Relying on what info get discovered, there could also be bar complaints, too.” There’s additionally the distinct risk of a felony referral stemming from this mess as nicely. So keep tuned for the subsequent episode of As The Chapter Courtroom Turns.
Kathryn Rubino is a Senior Editor at Above the Legislation, host of The Jabot podcast, and co-host of Thinking Like A Lawyer. AtL tipsters are the very best, so please join together with her. Be at liberty to e-mail her with any suggestions, questions, or feedback and comply with her on Twitter @Kathryn1 or Mastodon @Kathryn1@mastodon.social.