Top Bankruptcy Judge Resigns Amidst Ethics Controversy

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Houston Bankruptcy Judge Steps Down Following Ethical Concerns Over Relationship with Lawyer Linked to Financial Benefits

U.S. Bankruptcy Judge David R. Jones has tendered his resignation due to an ethics complaint alleging an “intimate relationship” with a lawyer with financial interests tied to cases within his jurisdiction. This development follows the recent filing of an ethics complaint by the 5th U.S. Circuit Court of Appeals chief judge in New Orleans on October 13th, as reported by the Wall Street Journal and Reuters.

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Living Arrangements and Conflict of Interest

• The ethics complaint revealed that Judge David R. Jones and lawyer Elizabeth Freeman had shared a residence since approximately 2017.
• Elizabeth Freeman was previously a partner at the Houston bankruptcy law firm Jackson Walker until December 2022, when she established her law firm, the Law Office of Liz Freeman.
• Jackson Walker frequently represented clients before Judge Jones in bankruptcy cases, and substantial fees were approved for the firm.
• Although Elizabeth Freeman was not the official counsel in these cases, she did work on some of them, and the fees requested for her services were significant.
• Notably, Judge Jones did not recuse himself from cases involving Jackson Walker and failed to disclose his relationship with Freeman to the parties or their counsel.
• The ethics complaint also concerns Judge Jones approving a fee application from the law firm that Freeman founded in December.

Recusal Motion and Mediator Appointment

• In one instance, a recusal motion was filed based on Judge Jones’ alleged relationship with Elizabeth Freeman. He forwarded the motion to another bankruptcy judge without disclosing the nature of their relationship, as indicated by the ethics complaint.
• This motion was ultimately denied, and the denial was upheld on appeal by a district court judge unaware of the underlying relationship.
• Additionally, Judge Jones accepted an appointment to serve as a mediator in a case where Freeman was the attorney of record for one of the parties. The ethics complaint argues that the relationship was not disclosed.

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Judge’s Response and Resignation

• Judge David R. Jones provided a statement to the Wall Street Journal, stating that he resigned due to his concern that his presence had “become a distraction to the good work” of the bankruptcy court.
• In a prior statement to the newspaper, he explained that he did not disclose his relationship with Freeman because they were not married and did not personally benefit from her work at Jackson Walker.

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