On Sunday, the U.S. Trustee and Jackson Walker told Chief U.S. Bankruptcy Judge Eduardo V. Rodriguez they had agreed to a deal where the law firm will pay $15 million to end efforts to claw back millions in fees it earned in certain bankruptcy cases.
Notice of the settlement comes about two weeks after Chief Judge Rodriguez declined a joint request from the parties to extend deadlines in the case. The U.S. Trustee, referred to as the watchdog of the bankruptcy system, had sought to vacate more than $20 million in fees awarded to the firm in 34 cases involving former Houston bankruptcy judge David Jones and former Jackson Walker bankruptcy partner Elizabeth Freeman.
The U.S. Trustee got involved in the litigation after the once-private romantic relationship between Jones and Freeman was publicly reported, which also led to Jones’ resignation from the bench.
“JW represents that it will comply with all applicable bankruptcy disclosure requirements and ethical obligations,” the five-page settlement term sheet reads. “JW has agreed to implement certain changes to its conflicts screening and disclosure practices, as will be set forth more fully in the consent order, to the extent not already implemented.”
The parties had been scheduled for a non-evidentiary hearing in Houston Tuesday afternoon, where Jackson Walker was set to argue the U.S. Trustee did not have standing to pursue the relief sought through the vacatur motions it filed in the 34 cases.
The lawyers for the firm and the U.S. Trustee did not immediately respond to messages seeking comment Monday morning. Jackson Walker, through a spokesman, declined to comment Monday.
The settlement struck over the weekend comes on the heels of Chief Judge Rodriguez’ decision to recommend approval of nine settlements Jackson Walker reached with former bankruptcy clients, totaling about $4.7 million.
Jackson Walker is represented by Jason Boland, Julie Harrison, William R. Greendyke and Maria Mokrzycka of Norton Rose Fulbright, and Rusty Hardin and Emily Smith of Rusty Hardin & Associates.
The U.S. Trustee is represented by Laura Steele, Millie Sall, Joel Charboneau and Vianey Garza of the Department of Justice.
The case number is 4:23-cv-04787.