How Four Judges Kept Romance Allegations Quiet for Two Years

Michael Van Deelen had been waiting nearly eight months for a hearing before Houston Judge David R. Jones when he opened his Spring, Texas, mailbox and found what he would call “a most disturbing communication.”

Inside was an anonymous letter claiming Jones and lawyer Elizabeth Freeman were in a relationship and that her law firm, Jackson Walker, had gotten favorable treatment because of it.

Van Deelen, who held about 30,000 shares in engineering giant McDermott International, felt the company unnecessarily declared bankruptcy. He had filed a motion to recuse Jones from the company’s Chapter 11 case, accusing him of bias in favor of McDermott and its lawyers at Kirkland & Ellis, the legal behemoth working with Jackson Walker.

The letter he found Saturday, March 6, 2021, supplied ammunition for his argument.

“The romantic relationship between Judge Jones and Elizabeth Freeman is publicly known and because of that, the largest corporations and clients willingly choose to work with JW lawyers knowing that they will likely have the court and the judge in their favor,” the letter said.

Van Deelen sent a copy of the letter to Jackson Walker the same day he received it. The accusation was a legal and existential threat to the Houston law firm. That Monday, the firm sent a lawyer to deliver a copy of the letter to Jones’ chambers and asked the court to seal it. Van Deelen then added the letter to his already-pending recusal motion.

The bankruptcy system is supposed to be transparent, but the letter was kept out of the public eye for more than two-and-a-half years. At least four judges kept the document sealed or suppressed efforts to examine the allegations, Bloomberg Law found. Some went so far as to direct Van Deelen to not publicly discuss its contents.

This is Part 2 of Bloomberg Law’s investigation into the relationships in the Houston bankruptcy court. Read Part 1: Sex, Secrets Trigger Downfall of Star Texas Bankruptcy Judge

When the details were finally made public, in October 2023, a judicial scandal engulfed Houston’s bankruptcy court and exposed its clubby culture.

Jones soon left the bench he had built to national prominence, a chief appeals court judge lodged an ethics complaint against him, and a unit of the Justice Department, the US Trustee, moved to claw back $13 million in fees Jackson Walker earned while Freeman was a partner and lived with him.

In Houston’s bankruptcy community, potential conflicts were not unusual. But the judge’s relationship with a lawyer in his court, the US Trustee wrote, “undermined the confidence the parties and the public could place in the impartiality of the bankruptcy system.”

Jones didn’t respond to interview requests or written questions from Bloomberg Law. Freeman, through her attorney, declined to comment.

The real problem created by the scandal, said former Nevada bankruptcy judge Bruce Markell, is the perception of judges. “If you don’t have faith in the integrity and honesty of judges,” Markell said, “you don’t have much of a system.”

Quickly Sealing the Allegation

After getting the letter, Van Deelen emailed Matthew Cavenaugh, Jackson Walker’s co-counsel on the McDermott case. Jackson Walker dates to 1887 and bills itself as the largest firm in Texas, with more than 500 attorneys.

Cavenaugh asked the court to seal the letter.

As Van Deelen pushed to remove Jones from the McDermott case, the judge referred the motion for reassignment to his fellow Houston judge and mentor, Marvin Isgur.

Isgur took the matter himself and ordered the letter sealed until it could be admitted into evidence.

Meanwhile Cavenaugh moved to internally address the letter’s allegation that the relationship benefited the firm. He reached out to Jackson Walker’s general counsel and other attorneys there to look into the allegations.

Freeman has since said in a court filing that neither Jackson Walker nor Kirkland knew about the relationship when McDermott filed for bankruptcy in January 2020.

Freeman confirmed to Jackson Walker there had been a romantic relationship with Jones in the past, according to court documents filed by the firm years later, after the relationship became public. Jackson Walker told Freeman to stop work on all matters in Jones’ court while it looked into the issue.

Kirkland declined an interview request but referred Bloomberg Law to its court filings, maintaining any relationship between the judge and Freeman has “nothing to do with” the firm. A spokesperson has previously said Kirkland has “abided by its ethical responsibilities, and has made accurate representations to the court, including all required disclosures.”

Van Deelen’s March 2021 correspondence and court filing were the first time Jackson Walker heard of the relationship, said its spokesman Jim Wilkinson of communications firm TrailRunner International. The firm acted responsibly and promptly once it learned of the issue, he said.

At a court hearing four days after Van Deelen sent the letter to Jackson Walker, no one from the firm confirmed that it was aware Freeman had, at the least, been in a prior relationship with the judge. Isgur rejected Van Deelen’s push to take depositions to investigate the letter’s veracity.

“I’m not going to let you take a deposition about the contents of an anonymous letter,” Isgur said. “That would be totally outrageous.”

Isgur said Van Deelen couldn’t discuss the letter’s substance, calling its contents inadmissible hearsay, and also denied the motion to recuse Jones.

It’s not clear whether Isgur had asked Jones, his friend and colleague for decades, if the letter’s contents were true. Isgur declined an interview request and didn’t answer written questions from Bloomberg Law.

With the letter’s allegations defused for the time being, Jackson Walker continued looking into the relationship and instructed Freeman to stay off matters before Jones.

Freeman told Jackson Walker the romantic relationship had ended sometime prior to March 2020, according to a draft of the firm’s internal review that it later filed in court. Freeman said she and Jones owned their own homes and had never lived together. She also said they had no current romantic relationship and that “none is expected going forward,” the internal review states. But property records would later confirm Freeman and Jones had indeed owned a home together.

Jackson Walker took several actions, including saying Freeman couldn’t receive any firm profits from Jones’ cases.

“I deeply appreciate the time and effort everyone has put into this very difficult situation,” Freeman emailed Jackson Walker’s then-general counsel Patrick R. Cowlishaw. “I lament that it was necessary. Thank you for everything.”

Meanwhile, Jackson Walker’s motion to seal the anonymous letter remained pending until September 2021.

Jones granted it himself, writing that the letter shouldn’t be made available without a court order, including to any Freedom of Information Act requests.

‘Probable Cause’

In March 2022, Jackson Walker received another accusation about the relationship, one that made attorneys there wonder if Freeman’s denial was “possibly false,” according to a court filing from the firm after the accusations became public.

The firm questioned Freeman again and she admitted “the relationship had resumed,” Jackson Walker said in the filing.

Freeman retained Tom Kirkendall, Jones’ and Isgur’s former law partner. In Spring 2022 he urged Jackson Walker to disclose the relationship and even prepared a draft disclosure for the firm, which he said would force Jones to reveal it, the US Trustee wrote in court documents. Kirkendall declined an interview request.

Still, no one involved publicly disclosed that Jones and Freeman were together.

By December 2022, Freeman left Jackson Walker to open the Law Office of Liz Freeman. Jackson Walker continued to retain her as contract counsel and let her use its office at times.

In the bankruptcy of life insurance bond seller GWG Holdings Inc., Freeman, representing the debtor, told Isgur she would take “comfort” if Jones were appointed as mediator, a Dec. 16, 2022 transcript shows. It was the same month she left Jackson Walker. Freeman was ultimately appointed as a trustee in the case.

Jones also led a three-day mediation in New York in August 2023 in the Chapter 11 of bankrupt prison healthcare company Tehum Care Services Inc. Freeman, representing Tehum affiliate YesCare Corp. in her solo practice, attended the negotiations.

Meanwhile, Van Deelen’s press to seek out the truth continued hitting judicial dead-ends.

In January 2023, US District Court Judge Andrew S. Hanen ruled that the anonymous letter was properly sealed and that its sender and “scurrilous” allegations “perhaps cannot” be verified.

“This form of unsupported character assassination has no place in any court proceeding,” he wrote. Hanen’s office said he does not comment on pending cases.

Determined, Van Deelen—who in 2020 filed a defamation lawsuit against Bloomberg LP over its coverage of his battle with Kirkland—again sued Jones in US District Court on Oct. 4, 2023 related to his actions in the McDermott case. The case, assigned to District Court Judge Keith P. Ellison, again included a copy of the anonymous letter.

And this time, Van Deelen attached as further proof information he found on the website TruthFinder showing Jones and Freeman had owned a home together since at least 2017.

The complaint remained publicly unavailable, sealed without request by Ellison due to “judicial security.”

Ellison told Bloomberg Law he expected he was going to be disqualified from the Van Deelen case and kept the complaint sealed to preserve the status quo. “David is a colleague and we can’t hear cases from colleagues in our district,” he said. “And then plus he’s a friend beyond that.”

Business Insider got a copy of the motion and published a story about it on Oct. 6. The next day, Jones confirmed the relationship to The Wall Street Journal. He said it didn’t need to be disclosed because they weren’t married and “there was no economic benefit to him from her legal work.”

His assurances did little to slow the storm.

On Oct. 13, Chief Judge Priscilla Richman of the US Court of Appeals for the Fifth Circuit issued a formal misconduct complaint against Jones.

The complaint, which Richman made public despite not being required to, alleged there was “probable cause” to believe Jones engaged in misconduct. Jones’ fellow judges, Isgur and Hanen, weren’t aware of the relationship, wrote Richman, who declined an interview request.

By Sunday, Oct. 15, 2023, Jones determined that he had become a “distraction” to the court and announced he would resign in a month, shocking the corporate bankruptcy world. The resignation effectively short-circuited an inquiry by the Fifth Circuit.

Fallout

US Trustee Kevin Epstein soon embarked on a campaign to excavate the impact of Jones and Freeman’s relationship on at least 33 Jackson Walker bankruptcy cases.

The office is seeking to claw back the millions in compensation and expenses it says Jones awarded Jackson Walker while Freeman was both a firm partner and living with him. That includes at least $1.1 million in fees Freeman billed in 18 cases, charging up to $835 an hour, the office said.

Jones “had the single-most large chapter 11 cases in the country, which contributed to the growth of Jackson Walker’s bankruptcy practice,” Epstein wrote.

The US Trustee is trying to push the payment dispute out of the hands of Houston bankruptcy judges, including Isgur, saying it wants “an unbiased adjudicator.”

Freeman confirmed she paid half the property taxes on their home in 2021 and 2022, the US Trustee said, contradicting Jones’ assertion he received no economic benefit from her legal work.

More shoes could drop. Jackson Walker and the US Trustee won’t start formal discovery until May 15. The US Trustee’s investigation “will continue as long as circumstances warrant,” said Justice Department spokesman Matthew Nies.

Freeman continues to operate her own firm. It’s not clear whether Jones is planning a return to the bankruptcy field. Both are facing ongoing lawsuits and have disputed the legal claims against them. Jones contends he has judicial immunity.

Across the US, the Jones controversy has become a cautionary tale.

In February, New York University Law Professor Stephen Gillers spoke to about 250 lawyers as part of the New York City Bar Association’s continuing legal education effort. His focus: The Jones saga. Gillers told the lawyers to avoid such a scenario or immediately “extricate themselves” if it occurs.

“The harsh way of viewing these allegations is that Jones could enrich Freeman by enriching a firm in which she was a partner,” Gillers said in an interview. “A suspicious member of the public could say, they really had a thing going, didn’t they?”

Bloomberg Law is investigating US bankruptcy courts. If you have information about questionable practices in the courtroom or relationships among judges and lawyers, please send tips to James Nani or Ronnie Greene.