On Tuesday, February 6, 2024, Bloomberg Law reported that former bankruptcy Judge David R. Jones hired the law firm McKool Smith to defend him in a civil suit alleging he failed to properly disclose a relationship with a local attorney while serving on the bench.

Michael Van Deelen, a former shareholder of McDermott International, filed an amended complaint in January in federal court accusing Jones, along with former clerk Elizabeth Carol Freeman and the law firms Jackson Walker and Kirkland & Ellis, of violating racketeering laws and committing fraud and other torts related to McDermott’s 2020 Chapter 11 bankruptcy.

Van Deelen alleges Jones had an intimate relationship with Freeman during the time she served as his clerk and later worked at Jackson Walker. The amended complaint claims the law firms knew about the relationship but did not disclose it to the court and improperly profited from appointments and fee awards made possible by non-public information obtained through the relationship.

Jones had overseen the McDermott bankruptcy case, and Van Deelen objected to the proposed reorganization plan as a creditor. He claims in the suit to have received harsh treatment from Jones during bankruptcy court hearings.

In March 2021, Van Deelen filed a motion to recuse Jones after receiving an anonymous letter about the alleged corruption involving Jones and Freeman, but Judge David Isgur denied the motion without Jones disclosing the nature of his relationship with Freeman at the time.

Now, according to court filings, Jones has hired the Texas-based firm McKool Smith and attorneys John Sparacino, Patrick Pijls, and Gary Cruciani to mount his defense. Jones had previously defended himself but in October requested the U.S. Department of Justice take over his representation, though that request remained pending as of mid-November.

Jones resigned from the bench in November after admitting to living with Freeman in a romantic relationship for several years while serving as a federal judge, a disclosure he did not make previously in the Van Deelen matter.

The suit seeks forfeiture of attorneys’ fees it says were improperly awarded in cases involving the alleged undisclosed conflict of interest, as well as statutory damages, compensatory damages, and other remedies related to the racketeering and fiduciary duty claims.

Jones is arguing he should be shielded by judicial immunity for his actions taken as a sitting bankruptcy judge. However, the case is ongoing and will likely include disputes over the scope of such immunity and whether Jones’ conduct crossed any lines.

Going forward, McKool Smith’s representation of the formerly prominent Houston judge will see further motions practice and a possible trial on the merits of Van Deelen’s serious allegations regarding the failure to disclose a compromising relationship and its claimed impacts on bankruptcy matters and awards before the court.

 

 

Source: Bloomberg Law