Jackson Walker has reached two more proposed settlements with former bankruptcy clients, according to motions seeking approval filed with Chief U.S. District Judge Alia Moses this week.
Strike Liquidating Trust told the court it had reached a $440,000 settlement with Jackson Walker, while Auto Plus Auto Sales, formerly known as IEH Auto Parts, reached a $500,000 settlement with the Dallas-based law firm.
The bankruptcy proceedings for Strike and Auto Plus are among 33 bankruptcy cases where the U.S. Trustee, often referred to as the watchdog of the bankruptcy system, is seeking to claw back millions in fees awarded to Jackson Walker in cases where David Jones, a former bankruptcy judge who resigned from the bench amid a romance scandal, served as the judge or mediator.
Jones resigned after his previously secret relationship with Elizabeth Freeman, a former bankruptcy partner at Jackson Walker, was publicly reported. Freeman left the firm before the news became public.
Strike had filed for bankruptcy in December 2021 and retained Jackson Walker as cocounsel the following month. Auto Plus filed for bankruptcy in January 2023 and retained Jackson Walker in March of that year.
Neither the motion filed by Strike nor the motion filed by Auto Plus Auto Sales indicates how much Jackson Walker was paid for its services. Both companies announced the proposed settlement in motions filed Wednesday.
Strike and Auto Plus 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. The others are:
- Sungard AS New Holdings for $385,000, which is 93 percent of the fees Sungard paid to Jackson Walker;
- 4E Brands North America for $617,000, or 71 percent of the legal fees the company paid to the firm;
- Basic Energy Services for $783,000, or 50.7 percent of the fees Jackson Walker received from the company during its bankruptcy proceedings; and
- Seadrill Partners for $485,000, which is 63 percent of the fees Seadrill paid Jackson Walker.
The U.S. Trustee has voiced opposition to the settlements, asking Judge Moses to reject the deals as an effort to “prematurely and improperly short circuit the U.S. Trustee’s prosecution.”
The liquidating trustee for Strike and Auto Plus Auto Sales, Patrick Bartels, is represented by Thomas A. Woolley III, Timothy M. McCloskey and Carissa N. Brewster of McCloskey Roberson Woolley.
Jackson Walker is represented in the litigation by Jason Boland, William Greendyke, Julie Goodrich Harrison and Maria Mokrzycka of Norton Rose Fulbright and Rusty Hardin, Leah Graham and Emily Smith of Rusty Hardin & Associates.
The U.S. Trustee is represented by Millie Aponte Sall, Vianey Garza and Alicia Barcomb.
The case number is 4:23-cv-04787.