© Reuters. FILE PHOTO: U.S. Bankruptcy Judge David Jones, who oversees more major Chapter 11 cases than any other U.S. judge, is seen in a screenshot from video shot during a virtual interview with Reuters done from Houston, Texas, U.S. December 11, 2020. REUTERS/StWILMINGTON, Delaware - A Texas law firm did not follow standard disclosure practices in at least 27 cases that might have revealed its former partner was secretly in a romantic relationship with U.S.
Court records show Jones approved millions of dollars in fees for Jackson Walker, the leading local counsel firm for corporate debtors filing for bankruptcy in Houston since 2019, according to Bankruptcydata.com. Freeman became a partner in 2018. After allegations about the undisclosed relationship surfaced this month in a court filing by a litigant challenging an order by Jones, the judge acknowledged the relationship with Freeman in an interview with the Wall Street Journal. He said he believed he was not required to disclose the connection because Freeman did not appear in his courtroom, there was no economic benefit to him from her legal work and the two are not married.
The rule does not mention judges specifically; it refers to debtors, creditors and"parties in interest." But disclosing connections to judges appears to be a standard practice. In the court filings Reuters reviewed, the larger national law firms that worked for the debtor alongside Jackson Walker always indicated that they had searched for connections to the judges on the bankruptcy court.
If Jackson Walker lawyers knew of the relationship between Jones and Freeman but failed to report the connection in cases the firm was involved in, they may face accusations of having violated bankruptcy disclosure rules, eight legal experts said. Such violations can result in disgorgement of fees or even, in rare cases, criminal prosecution, they said.
It is unclear if the watchdog's review will have an impact on the case of GWG, since a plan to wind down the company went into effect in August and the official committee of creditors was dissolved. Freeman remains the GWG trustee.Bankruptcy judges often serve as mediators in complex cases that are being run by other judges. In the GWG bankruptcy, Jackson Walker on Nov. 30 asked the judge overseeing the case to appoint Jones as mediator.
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