A Texas bankruptcy judge recommended against a government request to move a case challenging fees paid to a law firm that were approved by a former judge who was in an undisclosed relationship with one of the firm’s lawyers, WSJ Pro Bankruptcy reported. The U.S. Trustee, a division of the Justice Department that functions as a watchdog for the nation’s bankruptcy system, is challenging roughly $13 million of fees earned by Texas law firm Jackson Walker in 17 bankruptcy cases over which former bankruptcy judge David R. Jones presided. One of Jackson Walker’s partners, Elizabeth Freeman, lived with Jones during that time and owned a house with him in the Houston area, which neither Jones, Freeman nor Jackson Walker revealed at the time. Jones resigned from the bench in October after the Fifth Circuit Court of Appeals started an investigation and filed a complaint stating it had found probable cause of misconduct. Southern District of Texas Chief Bankruptcy Judge Eduardo Rodriguez, who consolidated the government’s 17 motions to transfer the Jackson Walker fee matters under his watch, said the request didn’t meet the standard that allows such a move. He determined the motions weren’t filed in a timely manner, and that the trustee didn’t establish that the transfer would benefit the progress of the 17 bankruptcy cases. Instead, Judge Rodriguez said, the matter should stay in his court. This consolidated approach would mostly alleviate the concerns over efficiency raised by the government and Jackson Walker, the judge said.
