On Thursday, January 11, 2024, Michael D. Van Deelen filed an amended complaint in the United States District Court for the Southern District of Texas against former Houston bankruptcy judge David R. Jones, Elizabeth Carol Freeman, Jackson Walker LLP, Kirkland & Ellis LLP, and Kirkland & Ellis International LLP.

Van Deelen, a former shareholder of McDermott International Inc., alleges that the defendants violated federal racketeering laws and committed various common law torts in relation to the 2020 Chapter 11 bankruptcy of McDermott. Jones was the presiding bankruptcy judge over the McDermott case.

Initially, the focus of Van Deelen’s complaint was solely on Jones. However, in the amended complaint, Freeman, Jackson Walker, Kirkland & Ellis LLP, and Kirkland & Ellis International LLP are also named as defendants. Van Deelen alleges the law firms knew about the intimate relationship between Jones and Freeman but did not disclose it to the court and profited through lucrative appointments and fee awards made possible by the nonpublic information.

According to the complaint, Jackson Walker has received over $12 million in attorneys’ fees in cases before Jones, while Kirkland has received over $162 million in attorneys’ fees as lead counsel in 19 cases filed before Jones since 2018, with Jackson Walker serving as co-counsel.

The complaint claims that Jones and Freeman were in an intimate relationship and co-owned a home together from around 2017, during the time that Freeman served as a six-year clerk for Jones and later worked as a partner at Jackson Walker.

Van Deelen, as a creditor in the McDermott bankruptcy, objected to the proposed confirmation plan. He alleges harsh treatment in bankruptcy court hearings before Jones. The complaint also states that McDermott filed an action against company officers that was removed to federal court and assigned to Jones’ docket.

In March 2021, Van Deelen moved to recuse Jones after receiving an anonymous letter about alleged corruption involving Jones’ relationship with Freeman. However, Judge Isgur denied the recusal motion after conferring with Jones, who did not disclose his relationship with Freeman.

The complaint accuses the defendants of secretly using the Jones-Freeman relationship to profit through improper appointments and fee awards without disclosure to the court and creditors. It alleges this amounted to federal racketeering laws being violated, including honest services fraud, bank fraud, wire fraud, mail fraud, and obstruction of justice.

Other accusations include common law claims of fraud, breach of fiduciary duty, professional negligence, unjust enrichment, negligent misrepresentation, civil conspiracy, and interference with constitutional rights. Van Deelen is seeking “the forfeiture of attorneys’ fees, statutory damages, compensatory damages including mental anguish, and other damages in connection with Defendants’ violations of RICO and breaches of fiduciary duty, among other cause of action.”

Jones, who had overseen more major Chapter 11 corporate bankruptcy cases than any other U.S. bankruptcy judge in recent years, resigned in November after admitting that he and Freeman had been living together romantically for several years.

A copy of the original filing can be found here.