Kirkland & Ellis has requested the dismissal of a lawsuit accusing them of being aware of a former Texas bankruptcy judge’s undisclosed romantic relationship with a local attorney. The firm is seeking sanctions against the accuser and their attorneys.
This legal action follows the fallout from former bankruptcy judge David R. Jones’ relationship with a former partner at Jackson Walker, a Texas law firm that frequently appeared in Jones’ court before his resignation last year. Jackson Walker often worked alongside Kirkland in the Houston bankruptcy court.
Elizabeth Freeman, the former Jackson Walker attorney involved in the case, has also filed a motion to dismiss the lawsuit.
The lawsuit was initially filed by Michael Van Deelen, a shareholder in the 2020 Chapter 11 bankruptcy case of McDermott International Inc. Van Deelen accused Jones, who oversaw the McDermott case, of living with attorney Freeman without disclosing their relationship. He later added Kirkland and Jackson Walker as defendants, alleging that they also helped conceal the romance and potential conflict of interest. Freeman was also named as a defendant.
Kirkland stated in their dismissal motion filed in the US District Court for the Southern District of Texas on Monday that Van Deelen’s claims only show that the firm mistakenly assumed the federal judge was fulfilling his obligations. The firm denied any wrongdoing and emphasized that it is not required to assume a federal judge’s improper behavior.
Vane Deelen alleged that both law firms were aware of the relationship but chose not to disclose it, using the knowledge for financial gain. He claimed that Kirkland was awarded over $162 million in attorneys’ fees as lead counsel in cases where Jackson Walker served as co-counsel before Jones. Vane Deelen accused the firms of bankruptcy and honest services fraud, mail and wire fraud, and obstruction of justice under RICO.
In a separate motion, Kirkland requested sanctions against Van Deelen and his legal team, claiming they lacked factual basis for their allegations. Freeman, through her attorney Tom Kirkendall, also asked the court to dismiss the lawsuit, stating that her relationship with Jones did not cause the damages alleged by Van Deelen.
‘Kirkland was lied to’
Kirkland refuted the allegations, stating that they were not required to disclose potential conflicts involving their local counsel’s partner. The firm maintained that Van Deelen’s claims had no merit and distanced themselves from the alleged misconduct of Jones, Freeman, and Jackson Walker.
Freeman stated in her filing on Monday that neither Jackson Walker nor Kirkland were aware of her relationship with Jones when she joined the firm in 2018. She defended the nondisclosure in the McDermott case, citing that Jones did not have an economic interest linked to the bankruptcy estate.
Jackson Walker claimed they acted appropriately and accused Freeman of lying about the extent of her relationship with Jones. Freeman left the firm in December 2022.
The Bandas Law Firm is representing a former CEO in a similar lawsuit against Kirkland, Jackson Walker, Freeman, and Jones. The US Trustee is attempting to recover fees paid to Jackson Walker and Freeman amid the controversy.
Jones has asserted judicial immunity and requested dismissal of the suit. Kirkland is represented by Beck Redden LLP and Hueston Hennigan LLP, while Jackson Walker is represented by Rusty Hardin & Associates LLP.
Van Deelen is represented by Bandas Law Firm PC, Jones by McKool Smith PC, and Freeman by the Law Office of Tom Kirkendall.
The case Deelen v. Jones can be found here.