Sorrento Shareholders Lose Discovery Bid Over Judge Relationship

Sorrento Therapeutics Inc. shareholders lack grounds to appeal a bankruptcy court’s decision blocking a broad probe into whether company attorneys sought to exploit a romantic relationship involving the judge who previously oversaw its bankruptcy case.

A Sorrento shareholder committee was properly denied an investigation into company advisers, and the bankruptcy court’s ruling isn’t a final order warranting appellate review, Judge Lee H. Rosenthal of the US District Court for the Southern District of Texas ruled Thursday.

The committee appealed to the district court following a December 2023 ruling in the US Bankruptcy Court for the Southern District of Texas. Houston bankruptcy Judge Christopher Lopez said at the time that the proposed investigation into Latham & Watkins LLP and other Sorrento advisers was unwarranted.

The bankruptcy court order, which dismissed the probe request without prejudice, wasn’t properly teed up for review by a higher court, Rosenthal said Thursday. It also appears that the bankruptcy court didn’t abuse its discretion in denying the request, Rosenthal added.

The shareholder committee filed its motion for discovery just weeks after former Houston bankruptcy judge David R. Jones admitted to being in a romantic relationship with bankruptcy attorney Elizabeth Freeman, who briefly advised Sorrento around the time of its bankruptcy filing in February 2023.

The shareholders sought to understand whether those leading Sorrento’s Chapter 11 proceedings knew of, and potentially sought to take advantage of, the previously secret relationship.

Lopez, who took over the Sorrento proceedings following Jones’ resignation in October 2023, said the committee failed to point to anything suspicious about the way Jones handled the case.

Freeman and her former law firm, Jackson Walker LLP, face several legal investigations related to cases heard by or mediated by Jones.

The company is represented by Latham & Watkins LLP. The committee is represented by Glenn Agre Bergman & Fuentes LLP.

The case is Off. Comm. of Equity Sec. Holders v. Sorrento Therapeutics Inc., S.D. Tex., No. 24-00031, Opinion 3/27/25.