The Justice Department has weighed in on the Jackson Walker LLP bankruptcy proceedings, siding with creditors over the fee clawback situation tied to an ethics scandal linked to the law firm. The dispute involves the bankrupt hand sanitizer company, 4E Brands Northamerica LLC, which is a client of Jackson Walker.
The Texas-based law firm had recently requested to block creditors from accessing a potential reservoir of hundreds of thousands of dollars in disgorgement fees. This move by Jackson Walker, however, was disputed by the U.S. Trustee, arguing that it was “based on a false premise,” in a recent court filing with the U.S. Bankruptcy Court for the Southern District of Texas.
The Justice Department’s bankruptcy monitor echoed the sentiments of the US Trustee, asserting that Jackson Walker should not succeed in its attempts to halt creditors from pursuing these cash resources.
4E’s ongoing Chapter 11 case is placed right in the center of this financial and legal debate. This litigation forms a key part of the bigger ethical scandal plaguing the law firm.
For a detailed coverage of this development, read the full report on Bloomberg Law.