Two bankruptcy attorneys from Jackson Walker LLP expressed their anger with Houston bankruptcy judge David R. Jones in 2021, due to an undisclosed romance between one of their colleagues, Elizabeth Freeman, and the judge. The texts, seen in records viewed by Bloomberg Law, revealed that the attorneys wanted to protect Freeman from a public relations scandal, which eventually occurred when the relationship was revealed two years later, leading to the judge’s resignation.
The allegations were made by Michael Van Deelen, an aggrieved shareholder of McDermott International, which was then bankrupt. Van Deelen received an anonymous letter on March 6, 2021, claiming that Jones was in a relationship with Freeman and that Jackson Walker had received favorable treatment because of it. The letter gave Van Deelen ammunition for a hearing four days later to recuse Jones from a case he was pursuing.
The communication sparked a flurry of actions among Freeman’s colleagues at the firm, including Matt Cavenaugh, who texted his colleague Veronica Polnick on May 20, 2021, that Freeman and Jones had “been very careful” and had “taken a lot of steps.” However, the fact that they took so many steps made it problematic from a public relations standpoint, he said. Polnick, who was previously a briefing attorney for Jones, responded that they saw this coming ten years ago.
Since Jones stepped down last year, a criminal probe has been opened, and a pall has been cast over the Southern District of Texas bankruptcy court. The communications could be key in efforts by the US Trustee to disgorge up to $23 million in fees Jackson Walker collected in cases involving Jones while it employed Freeman. The government says the firm breached its ethical duties by failing to disclose the relationship.
Two days after Van Deelen told Cavenaugh about the anonymous letter, Polnick texted Cavenaugh that while there would be “some embarrassment,” she felt it would “be ok,” and they could “cover” until things passed. A hearing on Van Deelen’s requested recusal of Jones was scheduled for March 10. But Cavenaugh accused Van Deelen of “defamatory statements” and asked the court to seal the anonymous letter.
By September 2021, Jones granted Jackson Walker’s motion to keep the letter sealed. With the letter’s allegations defused and the hearing behind them, Cavenaugh turned his ire at “400,” Jones’ nickname stemming from the number of his Houston courtroom. Jones had a “selfish attitude” and needed “independent advice,” he said.
Amid the frustration, concern about potential public fallout brewed at Jackson Walker. A day after the hearing, Cavenaugh told Polnick the firm had hired a crisis communications expert. By May 20, 2021, Polnick and Cavenaugh discussed that Freeman couldn’t have any part in Jones cases. Polnick seemed worried in her texts, alluding to Cavenaugh that she, among others, socialized with Jones yet continued to work on cases before him.
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