Nine days after Southern District of Texas Chief Bankruptcy Judge Eduardo Rodriguez conducted a show cause hearing in a sealed courtroom, he has determined that his former colleague, David Jones, acted in bad faith when he consented to an interview with lawyers from Jackson Walker and Rusty Hardin’s firm. The ruling comes in a case where Judge Rodriguez must determine whether Jackson Walker should be forced to return about $13 million in legal fees earned in bankruptcy cases before former Judge David Jones.
SDTX Chief Bankruptcy Judge Seals Show Cause Hearing in Judge Jones, Jackson Walker Case
At the daylong hearing, Chief Judge Eduardo Rodriguez also denied a request to subpoena four years of phone and text logs from former bankruptcy Judge David Jones’ government-issued cell phone that the requesting party said was intended to investigate whether any ex parte communications had taken place between Jones and the attorneys who appeared before him. Chief Judge Rodriguez said he plans to quickly decide whether to partially or fully unseal a transcript and audio of the sealed portion of Wednesday’s hearing.
SDTX Chief Bankruptcy Judge Considering Contempt Proceedings, Sanctions Against Judge Jones, Jackson Walker
Chief Bankruptcy Judge Eduardo Rodriguez of Houston has ordered his former colleague, ex-bankruptcy Judge David Jones, and law firm Jackson Walker to appear in his court this Wednesday to explain why they apparently went behind his back and against his prior order to conduct a private interview regarding facts involving the judge’s secret romantic relationship with former Jackson Walker partner Elizabeth Freeman.
Chief Judge Rodriguez issued a show-case order Monday stating that the U.S. Trustee’s Office has informed the court that such an interview recently took place and demanded that Judge Jones and lawyers for Jackson Walker appear Wednesday at 8:30 a.m. to explain their reasons and face possible sanctions.
“Jackson Walker, its counsel and David R. Jones and his counsel must be prepared to explain to this court whether in fact the allegations raised in the U.S. Trustee’s notice regarding Jones’s interview by Jackson Walker’s counsel did in fact occur and if so explain to this court the details of such interview,” the chief judge wrote in a blistering three-page order.
At the same time, the plan administrator in the JC Penney bankruptcy is seeking to subpoena cell phone records of Judge Jones to see if he was secretly sending text messages to Freeman during court proceedings.
Conn’s Taps Sidley to Lead Bankruptcy
The Texas discount furniture and appliance retailer filed for Chapter 11 bankruptcy protection Tuesday in the Southern District of Texas citing more than $1 billion in debts.
SDTX Swears in New Bankruptcy Judge
U.S. Chief Bankruptcy Judge Eduardo Rodriguez officially administered the oath Tuesday to former Weil, Gotshal & Manges partner Alfredo Perez to become the newest bankruptcy judge in the Southern District of Texas. In an order signed July 16 by Chief Judge Rodriguez, Judge Perez will immediately join the Southern District’s complex case panel, which handles larger corporate Chapter 11 bankruptcies. Judge Perez, who will have chambers in Galveston, replaces former Houston Bankruptcy Judge David Jones.
Tehum Care Reaches $75M Settlement in Bankruptcy Dispute
Creditors and debtors in a Texas Two-Step bankruptcy case in Houston reached an agreement Wednesday that both sides believe will resolve more than 200 medical malpractice claims brought by inmates against prison healthcare provider Tehum Care Services, a subsidiary of Corizon Health. Tehum, which filed for Chapter 11 bankruptcy protection in 2023, agreed to pay $75 million to creditors, including the plaintiffs who accuse Corizon and Tehum of providing inadequate medical care that led to injuries and deaths at about 50 prisons in more than two-dozen states.
Deposition of Former Houston Bankruptcy Judge Put on Hold
The on-again, off-again deposition of former Houston Bankruptcy Judge David Jones is on hold again. Lawyers for Jackson Walker want to question Judge Jones about his secret relationship with one of its former partners while still handling corporate bankruptcy cases involving the lawyer and the law firm. But SDTX Chief Bankruptcy Judge Eduardo Rodriguez postponed the depo to determine which questions lawyers can force Judge Jones to answer.
SDTX Bankruptcy Judge Jones Seeks Dismissal of Romance-Related Lawsuit
A lawsuit against former Houston Bankruptcy Judge David Jones claiming that he conspired with lawyers at corporate law firms should be dismissed because “well-established judicial immunity doctrine … provides absolute immunity from suits for damages” for judges, lawyers for Judge Jones argued in court documents filed Thursday.
“This immunity applies even when the judge is accused of acting maliciously and corruptly, and the immunity extends to allegations of intentional misconduct,” David Boies, lawyer for Judge Jones, wrote in the motion to dismiss.
Motions Fly, Ex-Judge to be Deposed in SDTX Bankruptcy Court Romance Scandal Litigation
The litigation regarding the secret relationship between former Houston Bankruptcy Judge David Jones and former Jackson Walker partner Elizabeth Freeman heated up Tuesday when the U.S. trustee seeking to claw back $13 million in legal fees from the Texas law firm asked Southern District of Texas Chief Bankruptcy Judge Eduardo Rodriguez to reject Jackson Walker’s “no harm, no foul” defense and Jackson Walker won the battle to depose Judge Jones as part of its defense against the trustee’s efforts.
At the same time, in separate but related litigation, lawyers for former Bouchard Transportation Company CEO Morton Bouchard asked U.S. District Chief Judge Alia Moses of the Western District of Texas to reject the defendants’ motions to dismiss the racketeering and fraud lawsuit he filed earlier this year against Judge Jones, Freeman, Jackson Walker, Kirkland & Ellis and Portage Point Partners.
Narrow SCOTUS Majority Prohibits Nonconsensual Third-Party Releases in Bankruptcy
While the ultimate outcome of the Purdue Pharma bankruptcy case is likely to remain uncertain for quite some time, the failure to approve the plan may ultimately mean that no money at all will flow to these victims of the opioid crisis. However, the decision also stands to have much broader implications on the use of Chapter 11 to solve complicated problems, especially relating to mass tort cases. Given this potential to alter the landscape of Chapter 11 practice in future cases, the Court’s statutory analysis in the Purdue Pharma decision warrants close scrutiny.
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