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Bankruptcy

Hooters Files For Chapter 11 Protection in NDTX

Hooters of America announced Monday night that it had entered a restructuring support agreement to sell its remaining company-owned Hooters locations to a specific group of its current franchisees. In conjunction with this move, Hooters of America and 29 other Hooters-affiliated debtors also announced that they had voluntarily filed for Chapter 11 bankruptcy protection in the Northern District of Texas. Lawyers from Ropes & Gray and Foley & Lardner are advising.

Houston Judge Rejects $9B Bankruptcy Effort By J&J

Houston Bankruptcy Judge Christopher Lopez ruled late Monday that multiple flaws require him to dismiss Johnson & Johnson’s third attempt to use the federal bankruptcy courts to rid itself of 90,000 cases filed across the country by women suing pharmaceutical giant for making and selling baby powder that they claim caused their ovarian and other gynecological cancers. In a 57-page opinion, Judge Lopez said his ruling to reject J&J’s efforts to create a separate subsidiary in Texas called Red River Talc for the sole purpose of funding a $9 billion resolution of its talc powder cancer litigation through the bankruptcy process was “not an easy one, [but] it is the right one.”

GWG Trustee Sues Holland & Knight for $148M Over Alleged Beneficient Fraud

The bankruptcy trustee appointed to recover funds for creditors in the GWG Holdings bankruptcy case has sued Holland & Knight for nearly $150 million for “knowing participation in a fraudulent looting scheme and associated criminal enterprise” that included Dallas-based financial services firm Beneficient and its founder and CEO Bradley Heppner. In a 156-page complaint filed Friday in the U.S. Bankruptcy Court in Houston, the court-appointed trustee accuses longtime outside counsel Holland & Knight and one of its Dallas law partners of colluding with Heppner to “fraudulently induce” GWG to invest the $148.4 million to help BEN “stave off collapse” by repaying a senior lender.

Jackson Walker, US Trustee Drop Objections to Experts in Bankruptcy Fee Case

At an evidentiary hearing where the parties were supposed to fight to convince Chief U.S. Bankruptcy Judge for the Southern District of Texas, Eduardo V. Rodriguez, to strike the experts offered by the other side, a détente was reached shortly after lunch Thursday. But during the hearing, the U.S. Trustee revealed that the secret romantic relationship between former judge David Jones and former Jackson Walker bankruptcy partner Elizabeth Freeman began in 2010 or 2011 and said the firm learned about it in 2021.

Judge Recommends Ending Disciplinary Action Against Jackson Walker

U.S. District Judge Lee Rosenthal is recommending closing a proceeding that was initiated to determine whether Jackson Walker should face any disciplinary action for its failure to disclose a romantic relationship between its former bankruptcy partner and a sitting bankruptcy judge. The order came about four months after the case was randomly assigned to her court.

Jackson Walker, U.S. Trustee Move to Strike Each Other’s Experts in Bankruptcy Fee Case

On Thursday, the U.S. Trustee and Jackson Walker filed dueling motions to strike, with the law firm arguing the expert opinions of Richard J. Davis and Jonathan C. Lipson — a retired partner at Weil, Gotshal & Manges who now is in private practice, and a tenured bankruptcy law professor at Temple University-Beasley School of Law, respectively — and the U.S. Trustee arguing the same about an expert opinion from Renee Jefferson, who is the Larry Doherty Chair in Legal Ethics at the University of Houston Law Center.

JCPenney Tells Court Jackson Walker Must Disgorge Bankruptcy Fees

The 18-page lawsuit seeking to claw back about $1.1 million in bankruptcy fees, along with other damages, was filed Tuesday in the bankruptcy court for the Southern District of Texas, Corpus Christi Division and brings claims for disgorgement for failure to make bankruptcy disclosures, breach of fiduciary duty and negligence.

Bloomberg Law: Kirkland ‘Absolutely Shocked’ at SDTX Judge’s Secret Romance with ex-Jackson Walker Partner

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.

Texas Business Bankruptcies Skyrocket in DFW, Decline Slightly in Houston

For the fifth consecutive year, Texas led the nation in business bankruptcy filings, cementing its position as the premier destination for corporate restructurings. However, Delaware closed the gap significantly in 2024, surpassing Texas’ Southern District as the top venue for business bankruptcies.

Despite a tumultuous year marked by scandal in the Southern District, Texas’ three other federal court districts experienced significant increases in bankruptcy filings, ensuring the state maintained its dominance in this critical legal sector. The Northern District, in particular, emerged as a rising star, with its Chapter 11 caseload more than doubling.

The Texas Lawbook’s Mark Curriden has the details on these trends and more.

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