On Monday, October 16, 2023, Reuters reported that David Jones, a bankruptcy judge for the US Southern District of Texas, has resigned from his position following an ethics probe into a previously undisclosed romantic relationship with attorney Elizabeth Carol Freeman whose firm had cases before his court. The resignation ends Jones’ tenure as the busiest bankruptcy judge in the U.S.
The ethics probe was opened by a federal appeals court after it was discovered that Jones had failed to disclose his personal relationship with the attorney, whose firm, Jackson Walker, had cases before his court. The 5th Circuit said Jones had kept information about his personal relationship from two other judges who oversaw an effort to recuse him from a dispute involving bankrupt energy company McDermott International.
Jones had already stepped back from overseeing large bankruptcy cases and began reassigning them to two other judges on the court. Chief U.S. District Judge Randy Crane of the Southern District of Texas told Reuters that Jones resigned, effective November 15.
Ethics experts have said the undisclosed relationship casts doubt on the integrity of Jones’ court. The misconduct complaint has already led to a call for further review in the case of Tehum Care Services, a bankrupt affiliate of prison healthcare company Corizon, and could lead to similar challenges in other cases in which Freeman or Jackson Walker were involved.
Jackson Walker declined to comment on the resignation but resisted any suggestion their work could be up for further review. “From the time we first learned of this allegation, Ms. Freeman was instructed not to work or bill on any cases before Judge Jones. We are confident that we acted responsibly,” the firm said in a statement.
The office of the U.S. Trustee, which serves as the Department of Justice’s bankruptcy watchdog, said that Tehum’s restructuring should not be approved given new questions about the “propriety” of Jones’ role in the case. Jones served as a mediator during bankruptcy negotiations in which Freeman also took part.
Jones has been the most active bankruptcy judge in the U.S. since January 2016, overseeing 11% of all Chapter 11 bankruptcies involving more than $100 million in liabilities, according to data from Debtwire, which provides research and intelligence on credit markets.
The resignation of Judge Jones has raised questions about the integrity of the bankruptcy court and the potential for conflicts of interest. It is a reminder that the judiciary must maintain the highest ethical standards to ensure the public’s trust in the legal system.