Settlements mount against law firm caught up in bankruptcy judge's secret romance
May 15 (Reuters) - (Billable Hours is Reuters' weekly report on lawyers and money. Please send tips or suggestions to D.Thomas@thomsonreuters.com, opens new tab)
Houston-based law firm Jackson Walker agreed this week to pay $100,000 to one of its former bankruptcy clients, marking its latest proposed payout to resolve claims that it failed to disclose and profited from a romantic relationship between one of its partners and former U.S. Bankruptcy Judge David Jones.
The settlement, opens new tab between Jackson Walker and the trustee overseeing the bankruptcy estate of Brilliant Energy, a Houston-based electric utility, is the third such deal the law firm has struck since April.
Jackson Walker is already poised to pay back $1.5 million in fees across the three settlements in bankruptcy cases where Jones approved the firm's fee requests while he was in a romantic relationship with Elizabeth Freeman, who was a bankruptcy partner at Jackson Walker until December 2022.
A spokesperson for the firm said more settlement deals were in the works, but did not comment further. Brilliant Energy's Chapter 7 trustee Randy Williams did not immediately respond to a request for comment.
A spokesperson for the U.S. Trustee, the Justice Department's bankruptcy watchdog, declined to comment.
For months, the trustee has been trying to force Jackson Walker to disgorge millions of dollars in legal fees that Jones approved in at least 30 bankruptcy cases filed by the law firm.
The proposed settlements require approval by U.S. District Judge Alia Moses in Houston, who began overseeing the case in April. Moses has set a status hearing for May 22.
Jones was once the busiest bankruptcy judge in the U.S. and presided over the bankruptcies of JCPenney, Neiman Marcus, Party City and Chesapeake Energy, among many others. He resigned from the bench in October 2023 after admitting to sharing a home with Freeman.
The firm has said it was deceived by Freeman into thinking her relationship with Jones had ended in March 2020. After being confronted by Jackson Walker two years later, Freeman admitted that she and Jones had rekindled their relationship, the firm said.
A U.S. bankruptcy judge said in September that Jackson Walker knew Freeman was in the relationship and told no one, and instead billed $11 million in fees in cases where Jones was the judge or mediator.
After U.S. Bankruptcy Judge Marvin Isgur withdrew an ethics complaint against the firm in February, Jackson Walker said in a statement that "the evidence overwhelmingly demonstrates that Jackson Walker acted responsibly and appropriately at all times under the circumstances."
-- Law firms Cotchett Pitre, Robins Kaplan and Susman Godfrey have asked a U.S. judge in Michigan to award an additional $94 million in legal fees, opens new tab for their work on automotive antitrust settlements valued at more than $1.22 billion.
The firms said that as of March they had devoted a combined 388,956 hours into pursuing claims that auto parts makers conspired to fix prices on a large variety of products.
The new fee request covers legal work since 2019 and would push the firms' total awarded to $363 million. The attorneys said the settlement amount "is believed to be the largest amount ever obtained on behalf of indirect purchasers in the history of U.S. antitrust litigation."
-- A U.S. judge in Chicago on Monday approved an unusual nationwide class-action settlement resolving privacy claims against facial recognition company Clearview AI without any immediate and specific monetary payout for victims.
The settlement resolves claims that Clearview scraped billions of facial images from the web and sold information without consent, violating an Illinois biometric privacy law. Clearview has denied any misconduct.
U.S. District Judge Sharon Johnson Coleman also signed off on the settlement's unique attorney fee award — instead of getting a payout up front, Chicago-based Loevy & Loevy would receive 39.1% share of a theoretical future settlement amount, based on Clearview's value if the company goes public through an IPO or is liquidated through a merger or sale.
Coleman held that the 39.1% share is in keeping with "Seventh Circuit caselaw, where courts have routinely provided fee awards of 30% or greater of a common fund."
Read more:
Amazon, Apple seek legal fees as sanction in US consumer lawsuit
Epic Games' Cravath team wins fees in Apple contempt ruling
US lobbying firms see early revenue boost in Trump's second term
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