Law firm Jackson Walker has agreed to pay $15 million in a settlement with the Justice Department’s bankruptcy watchdog following the revelation three years ago that one of its partners maintained a secret romance with a judge overseeing the firm's cases.
The Office of the U.S. Trustee sought to strip the law firm of all fees it was awarded in 33 cases by Houston-based U.S. Bankruptcy Judge David Jones, who was once the nation's busiest bankruptcy judge. Jones resigned in October 2023 after acknowledging he was in a relationship and shared a home with Elizabeth Freeman, who was a Jackson Walker partner.
Jackson Walker has argued it acted responsibly in its handling of the relationship between Freeman and Jones. In its settlement with the U.S. Trustee, the firm said it "acknowledges, while not admitting fault, that it could have approached this matter differently."
A Jackson Walker spokesperson declined to comment on the settlement. A Justice Department spokesperson did not immediately respond to a request for comment.
The two sides said the settlement is subject to court approval. U.S. District Judge Alia Moses is overseeing the fee-dispute litigation between Jackson Walker and the Office of the U.S. Trustee.
The settlement announcement comes two days before the parties were scheduled to meet for a conference before Chief U.S. Bankruptcy Judge Eduardo Rodriguez. Rodriguez last month recommended court approval of nearly $5 million in separate, private settlements Jackson Walker reached with former bankruptcy clients whose cases were presided over by Jones.
A lawsuit by one of the clients alleged multiple Jackson Walker lawyers knew about the relationship between Jones and Freeman but kept it hidden, violating bankruptcy disclosure requirements and professional rules.
Freeman was a bankruptcy partner at Jackson Walker until December 2022. The firm has said it was deceived by Freeman into thinking the relationship had ended in March 2020. After being confronted by Jackson Walker two years later, Freeman admitted that she and Jones had rekindled their relationship, the firm said.
Attorneys for Freeman and Jones, who were not parties to the U.S. Trustee's disgorgement effort, did not immediately respond to requests for comment.
