U.S. Bankruptcy Judge David Jones, one of the nation’s busiest bankruptcy judges and one of the nation’s busiest with complex cases, has been arraigned by a federal appeals court for failing to disclose a years-long romantic relationship with a lawyer who tried his case. He resigned after filing a formal ethics lawsuit against him.
Judge Jones’ retirement could affect the reputation of the U.S. Bankruptcy Court for the Southern District of Texas in Houston. The court is known as the go-to court for large companies seeking to facilitate restructuring, including reducing their real estate portfolios. Legal experts say his resignation could also open the door to challenges to earlier rulings.
In his 12-year career as a bankruptcy judge, Jones helped major retailers like Neiman Marcus and J.C. Penney rebuild stable stores during the pandemic and navigated major debt negotiations like Serta Simmons Bedding. supported.he was currently directing Party City Chapter 11 Reorganization This helped North America’s largest party supplies retailer eliminate nearly $1 billion in debt.
Jones’ resignation comes after Chief Justice Priscilla Richman filed ethics charges against Jones, which were made public Friday following a formal judicial investigation from the Fifth Circuit Court of Appeals.
“There is probable cause to believe that there was misconduct by Judge Jones,” Richman said in his ethics complaint.
The misconduct includes Mr. Jones’ “intimate relationship with Elizabeth Freeman.” Elizabeth Freeman is a bankruptcy attorney who previously clerked for Jones and was a partner at the Jackson Walker law firm from 2017 to December 2022. Jackson Walker appeared regularly in Jones’ courtroom during that time, and the ethics complaint says Jones authorized him to pay “substantial” fees for the firm’s services.
According to the ethics complaint, there is a “substantial probability” that as a partner at Jackson Walker, Mr. Freeman either received a financial benefit or had a financial interest in the fees approved by Mr. Jones. According to the complaint, Mr. Jones did not recuse himself from the Jackson Walker case and did not disclose his relationship with Mr. Freeman to anyone involved in the bankruptcy case pending in court.
Jackson Walker said it became aware of the potential relationship between Freeman and Jones in March 2021 and conducted its own investigation with the help of outside counsel. At the time, Mr. Freeman was told to stop working on cases and processing claims assigned to Mr. Jones.
According to the ethics complaint, Freeman started her own law firm in late 2022, called the Liz Freeman Law Firm. Mr. Freeman’s attorney declined to comment on Mr. Jones’ resignation when contacted by Coster News, and attempts to reach Mr. Jones for comment were also unsuccessful.
Jones was known for helping large companies move through bankruptcy as quickly as possible, a necessity for business survival, especially during the pandemic. He undertook large national bankruptcies from Delaware and New York state courts and helped make Houston a complex bankruptcy destination.
Jones’ resignation will take effect on November 15th. All ongoing bankruptcy cases were assigned to other judges. The order signed Monday split Mr. Jones’ bankruptcy case between Chief Judge Eduardo Rodriguez, Judges Marvin Isgur, Judges Christopher Lopez and Jeffrey Norman. Isgur is currently overseeing Party City’s case, according to court documents.
Greg Gartland, a Chicago-based bankruptcy attorney, said: told Bloomberg News Jones’ resignation will open up other U.S. bankruptcy venues other than the Houston court, as he often served as a priority judge in national bankruptcies and complex bankruptcy cases.