HOUSTON (CN) — A Houston bankruptcy judge announced his resignation Monday amid allegations he had not disclosed the involvement of his girlfriend, an attorney and his former law clerk, in cases over which he presided.
U.S. Judge David R. Jones said in a letter that he will resign, effective Nov. 15, from the bankruptcy court for the Southern District of Texas.
The move comes three days after the Fifth Circuit revealed it had opened an ethics probe into Jones, spurred by a complaint about his handling of a recusal motion.
In his lawsuit against Jones filed Oct. 4, Michael Van Deelen said he received an anonymous note while involved in an adversary proceeding before Jones in the Chapter 11 bankruptcy of McDermott International, a Houston-based multinational engineering firm.
The letter, delivered to Van Deelen's home, informed him that Jones’ live-in girlfriend, Elizabeth Carol Freeman, had been a bankruptcy attorney and partner for the law firm Jackson Walker, Van Deelen says in his lawsuit. Freeman had also clerked for Judge Jones for six years before joining the firm.
The anonymous letter detailed a scheme in which bankruptcy filers would hire Jackson Walker to represent them and get favorable treatment from Jones due to his romantic relationship with Freeman, according to Van Deelen.
Van Deelen says Freeman helped Jackson Walker represent McDermott in the company’s bankruptcy overseen by Jones — but Freeman left Jackson Walker and opened a solo practice shortly after he filed the letter.
Chief U.S. Circuit Judge Priscilla Richman of the Fifth Circuit noted in a six-page complaint against Jones issued on Friday that since 2017 Jones had approved attorneys’ fees payable to Jackson Walker for several cases Freeman had worked on.
Though Jackson Walker did not list Freeman as the counsel of record for those cases, the amounts the firm billed for her services was substantial, Richman wrote.
Van Deelen moved for Jones to recuse himself from his adversary case involving McDermott International, and Jones referred the matter to his colleague, Southern District of Texas bankruptcy Judge Marvin Isgur, according to Van Deelen's complaint.
Isgur denied the recusal motion, noting the only evidence Van Deelen had of Jones and Freeman's relationship was the uncorroborated anonymous letter. Van Deelen appealed to a federal district court judge who denied the appeal.
In the Fifth Circuit complaint, Richman shared other instances where Jones, in his capacity as a judge, interacted with Freeman after she started her solo practice.
Jones did not disclose their relationship after another bankruptcy judge appointed him to be a mediator for a matter in which Freeman represented one of the parties.
“Jones conducted the mediation to a conclusion,” Richman observed.
Without disclosing their ties, Jones also approved a fee application submitted by Freeman’s firm in another matter he presided over, and he recommended to his colleagues that Freeman be appointed to the Lawyer Admissions Committee for the Southern District of Texas Bankruptcy Court, according to Judge Richman.
Though Jones and Freeman are not married, and do not hold themselves out to be spouses, Richman found Jones likely violated federal judges' code of conduct.
“There is probable cause to believe that Judge Jones has engaged in misconduct,” Richman wrote.
The Southern District of Texas’ clerk referred media questions about Jones’ resignation to Vikram Chandhok, the Fifth Circuit’s chief mediator.
Chandhok confirmed Jones had resigned via a letter dated Oct. 16 and effective Nov. 15, but he declined to provide a copy because court officials are still deciding whether to make it public.
Jones’ courtroom deputy did not respond Monday to an email seeking comment from Jones.
But the judge told Texas Lawbook he feels he has become a distraction. The ethics complaint has led at least one bankrupt company to ask for a review of their case.
“I love the bankruptcy process and the Southern District of Texas,” Jones said. “I have always said that the bankruptcy process should be about the participants and the preservation of jobs. I have become a distraction to the good work that the court does. To end that distraction and hopefully return focus, I have resigned.”
Jones, who took the bench in 2011, has been one of the most active bankruptcy judges in the country. He oversaw high-profile Chapter 11 cases including Neiman Marcus, Cineworld Group and Serta Simmons Bedding.
Court officials said Jones’ cases will be transferred to the Southern District of Texas’ four other bankruptcy judges.
Jackson Walker said in a statement that after it learned Freeman might be involved with Jones it told her to stop working and billing on any case that had been assigned to him, consulted with an independent outside ethics counsel and interviewed Freeman about the relationship.
According to Jackson Walker, Freeman left it in late 2022 to start her own firm and since then has not worked on any Jackson Walker cases in Jones' court.
"Our firm acted in a timely fashion once we learned of this issue, including conducting a full inquiry and consulting independent outside ethics counsel for their guidance. From the time we first learned of this allegation Ms. Freeman was instructed not to work or bill on any cases before Judge Jones. We are confident that we acted responsibly," a Jackson Walker spokesman said.
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