On Wednesday, February 7, 2024, Radar reported that hedge fund manager James Dondero has again called for the recusal of Judge Stacey G.C. Jernigan from the Highland Capital Management bankruptcy case. Dondero alleges the judge, who presides over the U.S. Bankruptcy Court for the Northern District of Texas, has exhibited bias against him.
Dondero, who manages Dugaboy Investment Trust, filed a motion on January 22nd requesting Judge Jernigan’s removal through a writ of mandamus from a higher court. The filing claims Jernigan has displayed partiality based on two self-published novels where the protagonists make negative comments about hedge fund operators. One major villain in the second novel also bears similarities to Dondero.
At a January 24th hearing to consider nearly $1 million in legal fees sought by Highland Capital, Judge Jernigan reportedly expelled all non-essential parties from the courtroom. This included lawyers, media, and public observers. An anonymous source said those present were told to identify themselves or leave after Jernigan and Highland’s lawyers raised the issue. Her decision to clear the courtroom has sparked concerns about lacking transparency.
Documents show more than half the legal fees Highland Capital is seeking were incurred after the opposing party, associated with Dondero, tried withdrawing their original claim. Attorneys argued the case did not require a trial that wasted judicial resources and trust assets.
Judge Jernigan has previously promoted her novels online in a way some say inappropriately drew connections to real pending legal matters and individuals. This continues a pattern of alleged bias against hedge fund managers like Dondero dating back to when the bankruptcy case was transferred to her court in Texas. Dondero aims to have Jernigan removed to allow a fair proceeding free of perceived partiality.
Source: Radar
