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US Bankruptcy Judge David Jones in Houston has tendered his resignation following a federal appeals court’s initiation of an ethics investigation prompted by a previously undisclosed romantic relationship with an attorney whose law firm had cases appearing before his court. This development marks the conclusion of his tenure as the most prolific bankruptcy judge in the United States.
Chief U.S. District Judge Randy Crane of the Southern District of Texas informed Reuters on Sunday that Jones’ resignation will become effective on November 15. Prior to this, Jones had already withdrawn from presiding over significant US bankruptcy cases and had reassigned them to two other judges within the court.
Neither Jones nor his courtroom deputy have provided immediate responses
The 5th U.S. Circuit Court of Appeals, headquartered in New Orleans, issued a formal complaint regarding misconduct against Jones on Friday. This action came after the judge disclosed his years-long romantic involvement and cohabitation with bankruptcy attorney Elizabeth Freeman. Until December 2022, Freeman had been a partner at Jackson Walker, a local law firm that filed numerous cases within Jones’ Houston courthouse.
The 5th Circuit alleged that Jones had concealed information about his personal relationship from two other judges who were overseeing an effort to disqualify him from a case involving the bankrupt energy company McDermott International.
Experts in ethics have pointed out that this undisclosed relationship raises concerns about the integrity of Jones’ court. The misconduct complaint has already triggered a call for further scrutiny in the case of Tehum Care Services, a bankrupt subsidiary of the prison healthcare company Corizon. It could also lead to similar challenges in other cases in which Freeman or Jackson Walker had been involved.
Watchdog for US bankruptcy matters
Jackson Walker has declined to comment on Jones’ resignation but has strongly opposed any suggestion that their work might be subject to further examination. In a statement, the firm stated, “From the moment we became aware of this allegation, Ms. Freeman was instructed not to work on or bill for any cases before Judge Jones. We are confident that we acted responsibly.”Freeman has not immediately responded to requests for comment.
The U.S. Trustee’s office, which serves as the Department of Justice’s watchdog for US bankruptcy matters, expressed its stance on Friday that Tehum’s restructuring should not be approved in light of the new questions concerning the “propriety” of Jones’ role in the case. Jones had previously acted as a mediator during bankruptcy negotiations in which Freeman was also involved.
From January 2016, Jones had been the most active US bankruptcy judge in the United States, overseeing 11% of all Chapter 11 bankruptcies involving more than $100 million in liabilities, according to data from Debtwire, a provider of research and intelligence on credit markets.
