Bankruptcy Plan Challenged After Judge Faces Ethics Probe (1)

The Justice Department’s bankruptcy monitoring program called into question a proposed bankruptcy plan that was mediated by a judge who admitted to a romantic relationship with an attorney involved in the negotiations.

A Chapter 11 settlement plan proposed by Tehum Care Services Inc., a shell company created by Corizon Health Inc. to resolve hundreds of medical malpractice suits in bankruptcy, is facing heightened scrutiny following the revelations, which center around Judge David R. Jones of the US Bankruptcy Court for the Southern District of Texas, one of the premier locations for handling complex Chapter 11 cases.

Jones last week admitted ...