Free Speech, Due Process and Trial by Jury
The court-appointed litigation trustee overseeing the GWG Holdings bankruptcy has asked a federal judge to approve a settlement with its subsidiary Beneficient that would clear the way for the parties to jointly go after Beneficient’s former director and chief executive officer, Brad Heppner.
The litigation trustee in the GWG Holdings bankruptcy dispute has asked a federal judge to approve a $405,000 out-of-court settlement agreement with the law firm Jackson Walker related to the scandal involving former Houston Bankruptcy Judge David Jones.
The GWG litigation trustee is the seventh party to reach a proposed settlement with Jackson Walker, which is accused of knowing about and failing to disclose a secret romantic relationship between one of its former bankruptcy partners, Elizabeth Freeman, and Judge Jones.
In four separate filings, GWG bondholders this week spoke out forcefully against requests from Jackson Walker, Porter Hedges, David Jones and Elizabeth Freeman to dismiss racketeering claims against them, doubling down on allegations that each party was enriched by keeping secret a “live-in, intimate relationship” between then-bankruptcy judge Jones and bankruptcy lawyer Freeman.
A filing this week marked the second time the U.S. Trustee’s Office, referred to as the watchdog of the bankruptcy system, has urged the presiding judge to reject proposed settlements the Dallas-based law firm has reached with its former bankruptcy clients.
The two-week-long hearing in the Dr. Phil McGraw bankruptcy case concluded Monday afternoon. Counsel presented their closing arguments to the Northern District bankruptcy court on whether the case should be dismissed or converted to a Chapter 7.
Strike Liquidating Trust and Auto Plus Auto Sales are among a handful of companies that have reached proposed settlements with Jackson Walker. Most recently, JCPenney reached a potential $1.4 million settlement with the law firm.
In one of the largest and most complex corporate bankruptcy filings in Texas this year, the financial arm of global auto parts seller First Brands Group sought Chapter 11 protection today in the Southern District of Texas, citing between $1 billion and $10 billion in liabilities but only $500 million to $1 billion in assets. Weil is advising the debtors.
Taut testimony was heard from Dr. Phil McGraw Tuesday in the bankruptcy case of his Merit Street Media. He will continue testifying Thursday. The hearing that began Sept. 16 and has spanned several days is expected to end on Monday.
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