DOJ Unit Opposes Jackson Walker Fee Deals in Judge Romance Suits

Jackson Walker LLP’s proposed fee settlements related to a once-secret romance between one of its former attorneys and a prominent judge have prompted pushback from the Justice Department’s bankruptcy watchdog.

The Texas firm is trying to circumvent legal procedures for challenging attorney compensation via its proposed deals to resolve fee disputes in the bankruptcy cases of hand sanitizer maker 4E Brands Northamerica LLC and Basic Energy Services Inc., the US Trustee said in two objections Tuesday in the US District Court for the Southern District of Texas.

The settlement motions from David Dunn, the liquidating trustee in both cases, come as Jackson Walker prepares for a Thursday status conference on the US Trustee’s allegations that the firm breached its ethical duties by failing to disclose the relationship between former bankruptcy judge David R. Jones and attorney Elizabeth Freeman, who left the firm in late 2022.

The US Trustee is seeking to recover for creditors more than $23 million in fees the firm collected for representing clients in a slew of bankruptcies involving Jones, who often approved the firm’s compensation in those cases. The watchdog sought to vacate several compensation orders in late 2023, after learning about the once-secret relationship.

Dunn joined in the US Trustee’s efforts last year but filed the settlement motions independent of the watchdog.

Attorneys for Jackson Walker and Dunn didn’t immediately respond to requests for comment.

Jackson Walker was approved for about $1.5 million in professional fees and expenses for its work on the Basic Energy Services bankruptcy in September 2022. The proposed settlement, if approved, would allow the Basic Energy Services liquidation trust to retain about $760,000—nearly half of that compensation.

The firm was approved for nearly $867,000 in professional fees and expenses in the 4E Brands bankruptcy in December 2022. The proposal for that case would allow Jackson Walker to retain nearly $250,000.

Approving the settlements “would be improper” because the liquidating trustee aims to resolve the US Trustee’s motions to vacate the employment orders without its consent, the DOJ unit said in its objections.

“The bankruptcy code and rules provide a comprehensive framework and requirements for disclosure from and payments to professionals that Dunn and JW are not free to ignore or rewrite” through a settlement, the US Trustee said.

The US Trustee last week asked the district court to consolidate the 33 professional fee challenges into one single proceeding because they all involve the same set of facts regarding the romance and Jackson Walker’s alleged actions.

A mid-May trial in the disputes was recently canceled, shortly after Judge Alia Moses transferred 33 fee cases from the US Bankruptcy Court for the Southern District of Texas to a federal district court.

Jackson Walker is represented by Norton Rose Fulbright US LLP and Rusty Hardin & Associates LLP. The liquidating trustee is represented by Bonds Ellis Eppich Schafer Jones LLP.

The case is In re Prof’l Fee Matters Concerning Jackson Walker Law Firm, S.D.N.Y., No. 23-cv-04787, objection 5/20/25.