Big Law Firms Accused of Hiding Bankruptcy Judge’s Romance (1)

A lawsuit alleging a former Texas bankruptcy judge improperly shielded a romantic relationship has been expanded to target his girlfriend, as well as law firms Kirkland & Ellis and Jackson Walker.

The amended complaint filed Thursday is part of the ongoing fallout of David R. Jones’ relationship with a former attorney at Jackson Walker, a Texas firm that regularly represented clients in Jones’ courtroom before he resigned in October.

Kirkland & Ellis, a behemoth in the restructuring community, and Jackson Walker filed “numerous misleading and dishonest federal court papers without disclosing the Jones-Freeman relationship,” plaintiff Michael Van Deelen alleged in an amended complaint filed Thursday in US District Court for the Southern District of Texas. Jackson Walker, which employed Freeman until December 2022, often served as local counsel to Kirkland & Ellis in large Chapter 11 cases.

The failure to disclose the relationship amounts to bankruptcy fraud, honest services fraud, mail and wire fraud, and obstruction of justice under the Racketeer Influenced and Corrupt Organizations Act, Van Deelen said in the complaint.

“Debtors received favorable treatment and attorneys got rich in a bankruptcy system akin to shipping lettuce by rabbits,” the amended complaint said.

Van Deelen was a shareholder and creditor involved in a Chapter 11 case Jones presided over, McDermott International Inc., when Jones was a judge for the US Bankruptcy Court for the Southern District of Texas. Van Deelen’s original October complaint accused Jones of living with Freeman for years and hiding the relationship. His complaint, initially filed against Jones only, led to a series of revelations that made the relationship public.

Millions in Fees

Van Deelen’s original complaint accused Jones of violating his constitutional rights. Thursday’s amended filing says Kirkland, the world’s largest law firm by revenue, was awarded more than $162 million in attorneys’ fees as lead counsel in cases in which Jackson Walker served as co-counsel before Jones.

The expanded complaint seeks the forfeiture of attorneys’ fees, statutory damages and compensatory damages that include mental anguish, and other damages connected to breaches of fiduciary duty and in connection with RICO violations.

“Judge Jones and Freeman plainly deceived the public and interested parties in bankruptcies by failing to disclose their relationship,” the complaint said. “But they did not deceive Jackson Walker or Kirkland & Ellis. Both firms knew of the relationship and used it to profit.”

Freeman initially denied to Jackson Walker in 2021 that she was in a “current” relationship with Jones, but admitted that they’d had a past relationship, Jackson Walker has said in court filings. The firm only learned in 2022 that those statements were “possibly false or at least no longer true,” it said.

Kirkland said in a statement that the suit was “filed by a serial litigant,” and “contains a series of baseless and false allegations.”

“Kirkland did not make any misrepresentations to the court, or fail to make any required disclosures, or violate any of our ethical responsibilities,” the firm said.

Freeman’s attorney, Tom Kirkendall, declined to comment. A Jackson Walker spokesman declined to comment, but has previously said the firm is confident it acted responsibly.

Jones has said in court filings he’s immune from the suit and has requested the Justice Department to defend him against the complaint.

Van Deelen is represented by Bandas Law Firm PC.

The case Deelen v. Jones, Bankr. S.D. Tex., No. 23-03729, Amended Complaint 1/11/24.