Seadrill Partners and Seadrill Limited — the offshore drilling rig operators whose bankruptcy proceedings are among the 33 cases where the U.S. Trustee’s Office is trying to claw back millions in fees awarded to Jackson Walker — asked the court on Friday to approve its $485,000 settlement with the Dallas-based law firm.
The U.S. Trustee, referred to as the watchdog of the bankruptcy system, is targeting cases where David Jones, a former bankruptcy judge, served as judge or mediator. Jones resigned the bench after a secret relationship with a former Jackson Walker bankruptcy partner, Elizabeth Freeman, was publicly reported. Freeman, who practiced at Jackson Walker while many of the 33 cases were being decided, left the firm before news of the relationship broke.
In the 13-page motion, Seadrill told Chief U.S. District Judge for the Western District of Texas Alia Moses that the settlement and release it reached with Jackson Walker “would resolve any and all claims and causes of action of any kind held by Seadrill against JW arising out of or related to the bankruptcy cases of Seadrill Partners, the bankruptcy cases of Seadrill Limited and the miscellaneous proceeding captioned In re Professional Fee Matters Concerning the Jackson Walker Law Firm, now pending … before the United States District Court for the Southern District of Texas.”
According to court documents in the Seadrill Partners bankruptcy, the total fees awarded in the case were $286,885, total expenses were $1,617, and Freeman received $28,223 in fees. And in the Seadrill Limited bankruptcy, the total fees awarded were $501,242, total expenses were $2,123, and Freeman received $5,594 in fees.
That means under the settlement, Jackson Walker has agreed to pay back about 61.5 percent of all fees awarded in the case.
“In exchange for this settlement payment, JW and Seadrill are providing mutual releases,” the motion states.
“Additionally, absent settlement, Seadrill will be forced to attend any future trial which would result in substantially more costs and fees being incurred by the Seadrill estates. More significantly, there are no other assets or matters to be dealt with in the bankruptcy cases, the only reason they have not been closed is the fee dispute litigation being settled herein, which is resulting in continued U.S. Trustee fees accruing.”
Seadrill Partners filed its Chapter 11 bankruptcy petition in December 2020, according to the motion, and the case was assigned to former judge Jones. Later that month, the firm hired Jackson Walker to represent it in the proceedings. Seadrill Limited filed its Chapter 11 bankruptcy petition in February 2021, which was also assigned to Jones, and the company hired Jackson Walker for that case in March.
In Nov. 2023, those cases were among dozens where the U.S. Trustee for Region 7, Kevin Epstein, filed a motion seeking to vacate the orders approving Jackson Walker’s fee applications.
Jackson Walker has also reached settlements in a few other cases, including with 4E Brands North America and Basic Energy Services.
The Seadrill settlement comes as the fee dispute cases are heading toward a trial. Earlier this month, Jackson Walker and the U.S. Trustee informed Judge Moses that attempts to mediate the dispute had failed, which she said would trigger her to schedule a trial in the case.
On July 3, Jackson Walker filed a demand for a jury trial. The U.S. Trustee hit back on July 16, telling the court the law firm “has no substantive right to a jury trial.”
Seadrill is represented by Philip G. Eisenberg and Simon R. Mayer of Troutman Pepper Locke.
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.