The U.S. Department of Justice's bankruptcy watchdog is seeking to force a law firm to give back millions of dollars in fees it earned in cases presided over by a top Texas bankruptcy judge after he confirmed he had been in an undisclosed romantic relationship with one of its lawyers, Reuters reported. The Justice Department's Office of the U.S. Trustee began filing motions in several corporate bankruptcy cases seeking to reverse decisions by Houston-based Bankruptcy Judge David Jones to award fees to Jackson Walker. Judge Jones presided over at least 26 cases in which he awarded Jackson Walker about $13 million in fees while he was in a relationship with a partner at the firm, the U.S. Trustee said in one of the filings. Similar motions were lodged in at least 10 other bankruptcy cases, including those of JC Penney, Neiman Marcus and Westmoreland Coal Co. The U.S. Trustee said throughout those bankruptcies, the fact that Jones was in a relationship and living with Elizabeth Freeman, a Jackson Walker partner who herself billed about $1 million in 17 of those cases, went undisclosed. It argued that the bankruptcy system was "significantly compromised" by their undisclosed intimate relationship, which "created an unlevel 'playing field' for every party in interest in every case Jackson Walker had before Judge Jones." The U.S. Trustee asked that the issue be referred to a judge in another district to examine.
