Jackson Walker LLP is set to face fee clawback trials in August due to allegations by the Justice Department that the firm neglected to disclose a supposed romantic relationship between one of its former attorneys and a well-known former Houston bankruptcy judge. The legal proceedings will examine whether award orders—amassing to approximately $1.8 million in compensation gathered in three Chapter 11 cases—should be rescinded.
The cases are part of the US Trustee’s objections to the firm’s compensation for acting as bankruptcy counsel in the Chapter 11 cases of Neiman Marcus Group LTD LLC, Seadrill Partners LLC, and Strike LLC. These trials proceed in light of last year’s revelations that Jackson Walker LLP failed to disclose allegations of an intimate relationship between former partner Elizabeth Freeman and former Judge David R. Jones.
As reported by the US Trustee, Jones presided over no less than 26 cases, awarding Jackson Walker about $13 million in compensation and expenses during the period when Freeman was both a partner at the firm and allegedly maintaining a personal relationship with Jones.
Jones resigned last year amid a wave of ethical controversies following the issuance of a formal complaint against him by the Fifth Circuit’s Chief Judge suggesting possible engagement in misconduct. Before his resignation, Jackson Walker regularly represented clients in his courtroom.
The ongoing challenges by the US Trustee have led them to request for all law firm compensation orders to be vacated citing potential ‘taint’ through the undisclosed revelations. In response, Jackson Walker has stated that Freeman was untruthful about the full scope of her relationship with Jones and has expressed confidence that it behaved responsibly. For the record, Freeman joined Jackson Walker in 2018 and departed in late 2022.
Jackson Walker LLP legal representation is provided by Norton Rose Fulbright US LLP.
Details of the cases are available here, Bankr. S.D. Tex., Nos. 20-32519, 20-35740, 21-90054, hearing 1/16/24.