A onetime partner at the Texas law firm Jackson Walker failed to disclose the full truth about an alleged romantic relationship she had with bankruptcy Judge David R. Jones, the firm said.
The attorney, Elizabeth Freeman, initially denied in 2021 that she was in a “current” relationship with the prominent Texas bankruptcy judge, but admitted that they’d had a past relationship, Jackson Walker said in a court filing Monday. The firm only learned in 2022 that those statements were “possibly false or at least no longer true,” it said.
The new information comes as the Justice Department’s bankruptcy watchdog, the US Trustee’s office, is challenging at least $13 million in fees the firm collected following revelations that it didn’t disclose allegations of a romantic relationship between Jones and Freeman.
Jones, who sat on the Houston-based bankruptcy court for 12 years, announced last month he would resign after admitting to a long-term relationship with Freeman. Freeman previously worked at Jackson Walker and, before that, as a clerk to Jones himself. She left the firm in December 2022.
Jackson Walker’s response to the US Trustee on Monday aims to correct what it said is speculation based on “preliminary allegations” against Jones made last month by the US Court of Appeals for the Fifth Circuit and “largely unsubstantiated” media stories.
The firm reiterated its stance that it first became aware of allegations of a relationship between Jones and Freeman in March 2021. After learning of the allegations, the firm said, it tapped outside counsel at Holland & Knight to help it probe the situation.
Jackson Walker in an August 2021 draft letter to Holland & Knight said Freeman had “confirmed that there is no current romantic relationship between herself and Judge Jones and that none is expected going forward.”
Jackson Walker noted that as part of its handling of the allegations, it disclosed the situation in 2021 to Kirkland & Ellis, the powerhouse restructuring firm that was its co-counsel in a bankruptcy case at the time.
Jackson Walker “did not know of any ongoing intimate relationship between Ms. Freeman and Judge Jones until 2022 when it learned, quite by accident, that Ms. Freeman’s denial was possibly false or at least no longer true,” the firm said in Monday’s filing.
“A credible third party volunteered new information to a Jackson Walker partner which led Jackson Walker to again question” Freeman, the firm said.
Jackson Walker said Freeman denied that the relationship was ongoing when the firm confronted her about it in 2022, but she later admitted to a current romantic relationship. Jackson Walker then launched discussions with her and her attorney “that ultimately resulted in her separation from the Firm,” the filing said.
Freeman, through her attorney Tom Kirkendall, declined to comment on Monday.
The US Trustee is questioning Jackson Walker’s fees approved in some of the most prominent Chapter 11 cases that Jones oversaw in recent years, including JC Penney Company Inc., Neiman Marcus Group LTD LLC, and Westmoreland Coal Co. Jackson Walker’s statement Monday was filed in several of those cases.
During Freeman’s tenure starting in May 2018, Jackson Walker’s debtor practice grew “very substantially” and it took on expansive local counsel roles with Kirkland as lead counsel, Jackson Walker said in its August 2021 letter. Much of that worked occurred before Jones or Judge Marvin Isgur, the firm said.
“This success was a team effort, involving other bankruptcy partners as well, but Elizabeth’s leadership and contribution were recognized as integral,” Jackson Walker said.
The Southern District of Texas bankruptcy court in recent years has become one of the most booming venues for large corporate Chapter 11s, in part because those cases were funneled via local rules to Jones and one other judge in the district.
Jackson Walker, a large Texas firm with more than 500 attorneys in six offices, has said that it made sure that Freeman wouldn’t work on or bill for any cases Jones was overseeing since it learned of the allegations in 2021. But court filings show that it didn’t disclose the allegations in dozens of cases when the firm appeared before Jones.
Holland & Knight and Kirkland & Ellis did not immediately respond to requests for comments.
The case is J. C. Penney Direct Marketing Services LLC, Bankr. S.D. Tex., No. 20-20184, preliminary response 11/13/23.