Federal Bankruptcy Judge Steps Down While Ethics Inquiry is Initiated

David Jones, federal judge in Houston, admitted to having a years-long relationship with attorney Elizabeth Freemen who was a partner with bankruptcy firm Jackson Walker.

Federal bankruptcy judge David Jones recently confirmed to the Wall Street Journal that he has been in a relationship with his former law clerk, Elizabeth Freeman. The couple has been sharing a home for years. Judge Jones emphasized that he was not required to disclose the relationship to litigants because she did not appear in his courtroom, there was no economic benefit to him from her legal work and because the two are not married. Elizabeth Freeman was a partner with Jackson Walker, one of the leading bankruptcy firms in the nation until December of 2022 when she left to start her own firm.

The relationship was brought to light within a lawsuit filed by a former shareholder of McDermott International, Michael Van Deelan. The case was originally filed in a Texas state court against the employees of McDermott alleging frand and breach of duty. The case was removed to Judge Jones court as McDermott was in bankruptcy. Elizabeth Freeman was one of the attorneys representing McDermott. Neither Jones nor Freeman disclosed their relationship.

Van Deelan learned of the relationship from an anonymous letter in March 2021. Van Deelan submitted the letter in a motion seeking the removal of Judge Jones. Another bankruptcy judge, Marvin Isgur, denied the motion. Van Deelan filed a pro se lawsuit alleging that Judge Jones retaliated against him for disclosing the relationship.

Initially, Jones denied the relationship. Then, in an surprising turn of events, he admitted the relationship to the Wall Street Journal stating in part that he would only need to disclose the relationship since the couple was not married and because he didn’t benefit economically from her legal work. He s that they did not own communal property.

According to public documents, Ms. Freeman and Mr. Jones purchased a home together in 2017. He told the Wall Street Journal that he owns the Houston home that Freeman lives in and that he pays the expenses. The documents raise questions as to the accuracy of his statements.

From 2017 until December 2022, Jackson Walker frequently represented clients in Judge Jones’ court. Judge Jones awarded attorney fees in many of those cases. According to Bloomberg, David Jones said he is resigning after the Fifth Circuit issued a formal complaint against him.

Judge Jones was a highly respected judge who received publicity for making Houston the most popular jurisdiction in the United States for complex bankruptcies. He implemented reforms that created the judge panel that was intended to provide more transparency. In an article, published by the Houston Chronicle, Jones was quoted as saying:

“I’m not married and have no children - just me and my three rescue dogs - and that has allowed me to put so much time and focus into making this work.”

The article also reports on the close working relationship between Judge Isgur and Judge Jones. Isgur hired Jones as an associate when they were both attorneys practicing complex corporate bankruptcy litigation in 1992.

The bankruptcy courts in Houston have been attracting hundred million dollar bankruptcies of large corporations. Initially, the panel consisted of two judges, Marvin Isgur and David Jones. A third judge, Christopher Lopez was added to the panel in January of 2023. On Friday, new rules were put into place to reassign the cases of Judge Jones after he requested his own removal from the complex cases.

Jones’ bombshell resignation will undoubtedly disrupt the bankruptcy courts in the Southern District. Legal scholars have expressed concern over the lack of disclosure from Jones and Freeman. Elizabeth Freeman has not publicly commented about the situation.