Free Speech, Due Process and Trial by Jury
A federal bankruptcy judge in Houston has determined that while a litigation trustee’s $4.65 million settlement demand is reasonable, the court cannot compel Relm Insurance Ltd. to fund the within-limits settlement.
Western District of Texas Chief U.S. Bankruptcy Judge Craig A. Gargotta issued a 199-page opinion and order Tuesday in a case he’s been presiding over for six years. He wrote that the trustee failed to prove all but one of its claims for relief and awarded just $1 in damages. “Further, there was insufficient evidence to support an award of damages or attorney’s fees in this case,” he wrote. “The result may be viewed as harsh, but it is appropriate.”
In the concise eight-page order, Chief U.S. District Judge for the Western District of Texas Alia Moses denied Jackson Walker’s demand for a jury trial, hit pause on several proposed settlements the firm has reached with its former bankruptcy clients, consolidated the 34 cases where the U.S. Trustee is trying to claw back millions in fees, and sent them back to the Southern District of Texas bankruptcy judge who had been overseeing the cases until April.
Pine Gate Renewables and 78 of its affiliated businesses filed for Chapter 11 bankruptcy protection Thursday in the Southern District of Texas as the North Carolina-headquartered business “continues to engage in a competitive sales process with multiple interested parties to transition ownership of its solar and energy storage project fleet while preserving jobs and maximizing value.”
The flurry of activity in the GWG bankruptcy case comes just days after the former chief executive officer of the company’s subsidiary, Beneficient, Brad Heppner, was indicted by federal authorities in New York on charges of securities fraud, wire fraud, falsification of records and making false statements to auditors. The bankruptcy case will be assigned to a different judge in the Southern District of Texas, Chief Judge Alia Moses has determined.
After a three-hour hearing, U.S. Bankruptcy Judge Scott Everett ruled to convert Dr. Phil McGraw’s Chapter 11 startup media bankruptcy case to a Chapter 7 and will have a trustee appointed. The ruling comes after a weekslong hearing in September on the motion to dismiss or to convert.
The court-appointed litigation trustee overseeing the GWG Holdings bankruptcy has asked a federal judge to approve a settlement with its subsidiary Beneficient that would clear the way for the parties to jointly go after Beneficient’s former director and chief executive officer, Brad Heppner.
The litigation trustee in the GWG Holdings bankruptcy dispute has asked a federal judge to approve a $405,000 out-of-court settlement agreement with the law firm Jackson Walker related to the scandal involving former Houston Bankruptcy Judge David Jones.
The GWG litigation trustee is the seventh party to reach a proposed settlement with Jackson Walker, which is accused of knowing about and failing to disclose a secret romantic relationship between one of its former bankruptcy partners, Elizabeth Freeman, and Judge Jones.
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.
© Copyright 2025 The Texas Lawbook
The content on this website is protected under federal Copyright laws. Any use without the consent of The Texas Lawbook is prohibited.