Lawyers at Jackson Walker never told lawyers at Kirkland & Ellis that one of its bankruptcy partners was having a secret romantic relationship with former Houston Bankruptcy Judge David Jones and that Kirkland would have taken action to make the couple’s cohabitation public if he had known about it, one of Kirkland’s top bankruptcy lawyers told the U.S. Trustee’s office in a recent deposition.
Kirkland partner Joshua Sussberg testified in a deposition in September that he was “absolutely shocked” when he learned in October 2023 about the undisclosed romance and cohabitation between Judge Jones and former Jackson Walker partner Elizabeth Freeman, according to an exclusive news report by Bloomberg Law.
Sussberg, who led Kirkland in representing J.C. Penney, Varsity Brands, Denbury Resources and McDermott International in their corporate restructurings, said that Judge Jones’ decision not to disclose his relationship with Freeman was a “lapse in judgment” and that it “tarnishes all these cases.”
Bloomberg Law reported it obtained a copy of Sussberg’s deposition in the case in which the U.S. Trustee claims that Jackson Walker breached its ethical responsibilities to disclose any conflicts that the firm or its partners had in dozens of business bankruptcy cases in which the firm acted as local counsel for Kirkland between 2019 and 2023. The U.S. Trustee, which is a division of the U.S. Justice Department, is seeking to claw back up to $23 million in legal fees paid to Jackson Walker.
Jackson Walker has declined to comment on developing stories, but its leaders previously told The Lawbook that Freeman lied to them about her relationship with the judge, that the firm acted ethically and that lawyers with the U.S. Trustee’s office in Houston may also have been aware of the secret relationship. Jackson Walker reported that Freeman left the firm in December 2022 after it became clear that there was a relationship between her and the judge. But Freeman continued to be involved in cases in which Jones was the judge or a mediator even after she left Jackson Walker to practice on her own.
The dispute over Jackson Walker’s legal fees is scheduled to go to trial in the Southern District of Texas in April. The U.S. Trustee has made no claims against Kirkland.
Sussberg said he told Jackson Walker bankruptcy partner Matt Cavenaugh in 2021 when an allegation of the Judge Jones and Freeman affair first surfaced in an anonymous letter that the firm had a legal duty to disclose any such relationships if they know anything about it.
“And he understood and acknowledged, and he didn’t say whether or not there was a relationship,” Bloomberg Law quoted Sussberg stating in the deposition about his conversation with Cavenaugh. “And in response, just a day later, they filed the document that said the statements within the letter are defamatory.”
In an article last week, Bloomberg Law reported that Judge Jones cited his Fifth Amendment rights against self-incrimination more than 100 times during his recent deposition with the U.S. Trustee, including when asked if his former colleague, Houston Bankruptcy Judge Marvin Isgur, was aware of the relationship with Freeman.
Judge Jones, during nine hours of questioning by lawyers for the U.S. Trustee, testified that the federal rules governing ethical conduct and disclosures do not require parties to reveal their connections to members of the court.
Bloomberg Law reported that Jones stated that he privately gave Cavenaugh proposed wording in 2022 that would state that Freeman had a “close personal relationship” with the judge. Before joining Jackson Walker, Freeman clerked for Jones.