Bankruptcy Lawyer Decries Removal ‘Scheme’ Over Ex-Judge Romance

Bankruptcy attorney Elizabeth Freeman said a bid by interest holders to oust her as GWG Holdings Inc.'s wind-down trustee due to her relationship with a former bankruptcy judge is part of a “scheme” to benefit themselves.

Freeman, a former Jackson Walker LLP partner who now runs her own private practice, argued in a Monday filing that the holders seek to “rewrite” a confirmed Chapter 11 plan and replace her and the litigation trustee with “collaborators.”

She also opposed a petition for Judge Marvin Isgur of the US Bankruptcy Court for the Southern District of Texas to recuse, saying he has “extensive knowledge” of the case and of the “malfeasance” of certain holders and insiders.

Freeman has faced scrutiny for not disclosing her relationship with former Houston bankruptcy judge David R. Jones, who resigned in 2023 after the romance became public. Holders moved to boot her from the GWG case earlier this month, saying her failure to disclose the romance allowed Jones, who served as a mediator in the bankruptcy, to appoint her as trustee.

The former bondholders now owning about 23% of the trust accused Freeman of breaching fiduciary duties and violating bankruptcy rules and professional ethics. They asked her to return all trustee fees, alleging the appointment let her “launch her new solo career” while earning $100,000 a month for six months and $50,000 monthly thereafter.

The group also sought to recuse Isgur, who had a friendship with Jones, since he appointed the former judge as mediator in 2023. The holders asked Chief US District Judge Alia Moses to review both matters.

GWG, a seller of secondary life insurance bonds, filed for Chapter 11 in 2022 during a probe by the US Securities and Exchange Commission into its bond sales and accounting. The court approved a wind-down plan in 2023, creating a trust to pursue estate claims.

Freeman claimed the interest holders want to install Murray Holland to pursue claims reserved for the litigation trustee. Holland led MHT Financial, which she said facilitated asset transfers, promising cash distributions to investors before funding closed.

She argued Holland and other officers, including former Beneficient Company Group director Bradley K. Heppner, helped cause GWG’s collapse.

The trustee questioned the timing and motivation of the motion, suggesting it may be tied to ongoing litigation against Holland, Heppner, and a group of the movants in the Delaware Chancery Court.

“Although movants have not yet suggested Holland or his shill as a successor trustee to the Wind Down Trust, it seems to be a next step in their plan of action,” Freeman said. “Movants are attempting to put the wolf in charge of the hen house.”

Freeman added that the interest holders lack standing because they don’t represent the required 25% of trust beneficiaries. She said her removal would cause costly delays as the trust nears completion and argued the motion alleges no misconduct in her role as trustee.

Probus Law Firm represents Freeman. Bandas Law Firm PC and Jordan & Ortiz PC represent the interest holders.

The case is GWG Holdings, Inc., Bankr. S.D. Tex., No. 22-90032, response 8/25/25.