Top US Bankruptcy Judge Resigns After Relationship With Law Clerk Revealed

Top US Bankruptcy Judge Resigns After Relationship With Law Clerk Revealed – A US bankruptcy judge presiding over more than 3,000 cases in the US Southern District of Texas has decided to resign following the revelation that he did not disclose a romantic involvement with his former law clerk. David Jones, known for handling significant Chapter 11 cases in the Houston bankruptcy court during his 12-year tenure, is stepping down, as confirmed by Chief District Judge Randy Crane to Business Insider.

This decision comes in the wake of a report revealing that Jones had sanctioned over $1 million in legal fees for services provided in 16 corporate cases between 2018 and 2022, all of which were handled by his live-in partner, Texas-based bankruptcy attorney Elizabeth Freeman. During this period, Freeman’s law firm, Jackson Walker, invoiced more than $6 million for its work on these cases.

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A complaint filed earlier this month against Jones disclosed that the two had been in a covert relationship for an extended period, with Freeman being referred to as his “live-in girlfriend.” Previously, Freeman had worked as Jones’ law clerk for six years and continued her legal career at the Jackson Walker law firm until December 2022 when she established her own practice, known as The Law Office of Liz Freeman.

These court documents were submitted by individual plaintiff Michael Van Deelan, a shareholder in the offshore driller McDermott International, which had filed for Chapter 11 bankruptcy in 2020. Jones — who has presided over high-profile chapter 11 cases for the likes of JCPenney, Neiman Marcus and oil drillers Denbury Resources — previously denied having a romantic relationship with Freeman despite the two living together in a home “valued in excess of $1 million” since 2017, according to the complaint.

According to a survivorship agreement linked to the house’s deed, obtained by The Journal, it explicitly designates both Jones and Freeman as co-owners of the property. The agreement stipulates that if one of them were to pass away, the other would inherit the property. Shortly after the complaint against Jones was filed, which marked the first public disclosure of the relationship between Jones and Freeman, the judge admitted to The Wall Street Journal that he has indeed been in a relationship with Freeman for an extended period.

Years ago, the two had mutually agreed that Freeman would never appear in Jones’ courtroom, as reported by The Journal. Jones explained to the publication that he did not perceive the need to disclose their relationship since they are not married, and there is no financial benefit to him from her legal work. “I came to the conclusion that I had no duty to disclose,” the judge told The Journal, adding that he believed he was entitled to a certain degree of privacy about their relationship.

Nevertheless, Jones eventually stepped down from the Houston court due to extensive media coverage of his tumultuous relationship, which prompted an inquiry by the federal appellate court responsible for Texas, as reported by The Journal. He disclosed this decision during a court hearing on a Friday, with the resignation set to be effective from November 15. 

The public’s interest in Jones and Freeman’s connection initially began when a plaintiff took legal action against Jones for his rulings in a 2020 bankruptcy case involving offshore driller McDermott International. In an emailed statement, Jones told Bloomberg Law:  “I have become a distraction to the good work that the court does. To end that distraction and hopefully return focus, I have resigned.”

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Van Deelan’s most recent complaint marks his second endeavor to challenge the Jones and Freeman relationship, claiming that their romantic involvement has adversely influenced the judge’s decisions. His previous 2021 filing, which aimed to have Jones recused from the McDermott case, was ultimately dismissed due to a lack of evidence. Van Deelan’s recent complaint filed in Houston federal court again called Jones out for misconduct.

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Claiming he and Freeman executed a “scheme in which corporate bank filers would hire Jackson Walker to represent them and then get favorable treatment from Defendant Jones because of his amorous relationship with Freeman.” McDermott was being represented by Jackson Walker throughout the case, which was presided over by Jones.

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