On Friday, U.S. Bankruptcy Judge Marvin Isgur referred Jackson Walker for possible disciplinary proceedings for its failure to disclose one of the law firm’s former bankruptcy partners had a romantic relationship with a sitting bankruptcy judge.
The U.S. Trustee is attempting to claw back millions in fees awarded to the Dallas-based firm in several bankruptcy cases presided over by former judge David Jones, who resigned from the bench in October when it came to light he had a secret romantic relationship with bankruptcy lawyer Elizabeth Freeman, who was a partner at Jackson Walker but was asked to leave the partnership after confessing to the firm in 2021 that the relationship existed.
In the two-page order, Judge Isgur also recused himself from all disputes “between the United States Trustee and Jackson Walker that relate to alleged non-disclosure issues by Jackson Walker.” The order was issued in the Chapter 11 bankruptcy case of Altera Infrastructure Project Services, in which former judge Jones acted as a mediator and Jackson Walker represented a party.
“I recognize that referring a matter for disciplinary concerns does not ordinarily require recusal,” Judge Isgur wrote.
But what makes this case unique, Judge Isgur explained, is that the substance of the disciplinary referral to Chief U.S. District Judge Randy Crane “substantially overlaps” with the substance of two issues set for summary judgment briefing in the Altera case:
- whether the final fee order awarding fees to Jackson Walker should be vacated; and
- whether the United States Trustee has standing to seek a monetary recovery on behalf of the reorganized debtor
“In this case,” Judge Isgur wrote, “it would be inappropriate for me to refer a matter for disciplinary action, and then to grant or deny relief in a bankruptcy case based on findings and conclusions concerning the same situation that was referred.”
“The court independently determined to issue the summary judgment order prior to determining recusal. Indeed, the summary judgment order, in part, precipitated the recusal in multiple disputes between the United States Trustee and Jackson Walker. Because I have now determined that recusal is appropriate, I respectfully request that my replacement judge on this Altera matter review my summary judgment procedures order to determine whether it should be vacated or modified.”
Jackson Walker is represented by Jason L. Boland, William Greendyke, Julie Harrison, Maria Mokrzycka, Paul Trahan and Emily Wolf of Norton Rose Fulbright and Rusty Hardin, Leah M. Graham, Jennifer E. Brevorka and Emily Smith of Rusty Hardin & Associates.
The U.S. Trustee is represented by Vianey Garza, Millie Aponte Sall and Alicia L. Barcomb of the Department of Justice.
The case number is 22-90129.