Free Speech, Due Process and Trial by Jury
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.
Facing a $949 million federal court judgment for improperly billing charges to Medicaid, Medicare and Tricare, Rhode Island-headquartered pharmacy services company Omnicare Inc. filed for Chapter 11 bankruptcy protection Monday in the Northern District of Texas. The company stated the Chapter 11 filing will give it time to work on resolving the federal legal dispute, which is the huge majority of Omnicare’s liabilities.
The trustee of a bankrupt financial services startup aimed at conservative customers that Winston & Strawn represented is suing the law firm and one of its partners for alleged malpractice. The trustee for GloriFi, seeking more than $1.7 billion in damages, claims Winston & Strawn schemed with the company’s founder, putting his interests over those of the business.
Winston & Strawn said it “will vigorously defend against these meritless claims, including the fanciful, billion-dollar lost value claim for a company that never opened its doors for business.”
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