Free Speech, Due Process and Trial by Jury
Residential solar company Sunnova TEP Developer, a subsidiary of Houston-based Sunnova Energy International, filed for Chapter 11 bankruptcy protection this week in the Southern District of Texas.
Jackson Walker has agreed to attempt to mediate claims brought by federal officials that the Dallas-based law firm should be forced to return millions of dollars it was paid in legal fees from 33 bankruptcy cases in which Jackson Walker lawyers failed to disclose that one of its former partners had a romantic relationship with the Houston judge who was presiding over those cases. The U.S. Bankruptcy Trustee in the Southern District of Texas and lawyers for Jackson Walker filed a joint notice Friday stating that they “intend to participate in an in-person mediation” between June 16 and July 1. (2020 file photo of David Jones by Brett Coomer/Houston Chronicle via Getty)
The U.S. Supreme Court granted an emergency stay to Highland Capital Management, halting a lower court decision that allowed former CEO James Dondero to sue parties involved in the firm’s bankruptcy. Justice Samuel Alito issued a one-page order that pauses a March ruling by the Fifth Circuit Court of Appeals, which had permitted Dondero to pursue litigation against individuals previously deemed protected by a North Texas bankruptcy judge in relation to Highland Capital’s bankruptcy and restructuring.
Houston-based Ascend Performance Material and eight of its affiliated businesses filed for Chapter 11 bankruptcy protection Monday citing $1 billion to $10 billion in liabilities, according to its filing in the Southern District of Texas.
Less than 48 hours after lawyers representing some of the thousands of women claiming that Johnson & Johnson talc powder caused their ovarian cancer asked a Houston judge for “a do-over” and to reconsider his ruling dismissing their efforts to reach a settlement agreement through the bankruptcy court, the judge issued his answer Thursday: No can do.
California-based Global Clean Energy Holdings, a renewable fuels company, filed for Chapter 11 bankruptcy protection in the Southern District of Texas early Wednesday. Citing between $1 billion and $10 billion in liabilities and assets in its original petition, Global Clean Energy and 15 of its affiliated companies hired Kirkland & Ellis as its lead legal advisor and Norton Rose Fulbright Houston partner Jason Boland as its local legal bankruptcy counsel.
U.S. Bankruptcy Judge Marvin Isgur ended a hearing Friday morning in the GWG Holdings case after finding lawyers for the trustee had failed to meet their due process obligations under the constitution to provide bondholders with notice of how a proposed settlement would impact them. “I find there is not due process notice and this is not a close call,” he said, adding the effort of the lawyers to inform bondholders, some of whom put their life savings in the company, that they could expect to get back only about 3 percent of what they invested was “completely deficient” and “an embarrassment.”
Chief U.S. District Judge for the Western District of Texas, Alia Moses, has taken control of the 34 bankruptcy cases where the U.S. Trustee is seeking to clawback millions in fees awarded to Dallas-based Jackson Walker. “This unique case nevertheless requires stiff measures. The need to reestablish public trust and confidence in the court system alone impels withdrawal in this highly unusual case,” she wrote.
Roughly one month after deciding a bankruptcy judge should determine whether a former CEO can proceed with his lawsuit alleging he was the victim of a conspiracy carried out in proceedings before former bankruptcy judge David Jones, a federal judge changed her mind this week.
In paperwork filed with the court Monday, the chief restructuring officer for 4E Brands North America told U.S. Bankruptcy Judge Christopher M. Lopez that the Dallas-based law firm has agreed to pay back $617,000 of what it was awarded for work on the bankruptcy case.
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