Jackson Walker Lawyers Spoke of Secret Judge Romance, Texts Show

Two Jackson Walker LLP attorneys exchanged text messages in 2021 showing they knew about, and discussed the potential fallout of, an undisclosed romantic relationship between a firm lawyer and a former Houston bankruptcy judge.

The texts, which were displayed in records viewed by Bloomberg Law, appeared to be the subject of debate during a bankruptcy court hearing Tuesday over discovery related to the Justice Department bankruptcy unit’s claims that the Texas law firm breached its ethical duties. The bankruptcy monitor, the US Trustee, says Jackson Walker should disgorge at least $18 million because the firm failed to disclose what it says is a clear conflict of interest.

The relationship between Elizabeth Freeman, a partner who left Jackson Walker in late 2022, and David R. Jones, the prominent bankruptcy judge who resigned from the bench last year after admitting to the romance, has roiled the Houston bankruptcy community and prompted several legal actions.

The texts viewed by Bloomberg Law, which indicate the Jackson Walker attorneys who sent them were trying to “protect” Freeman, are notable in light of the firm’s statements that it took appropriate actions when it learned of the relationship. Jones regularly presided over Jackson Walker’s cases in bankruptcy court before he resigned.

A US Trustee attorney said during Tuesday’s hearing in the US Bankruptcy Court for the Southern District of Texas that some Jackson Walker LLP employees knew about, and tried to conceal, the romance. They came up with a plan to try to conceal the relationship when the possibility that it could become public arose, US Trustee attorney Joel Charboneau said.

“What the employees did is they came up with a plan, and the plan was to get documents sealed so that it wouldn’t be public,” Charboneau said. “The evidence is going to show that the employees spoke about this—Freeman and former Judge Jones—in a way that shows that no less than three of the employees of Jackson Walker had knowledge that they were in a relationship.”

Rusty Hardin of Rusty Hardin & Associates LLP, representing Jackson Walker, told Chief Judge Eduardo V. Rodriguez on Tuesday that there’s been no evidence that “anyone in management” at the firm knew about the relationship. He said there’s a “strong disagreement” about the meaning of the texts.

Jackson Walker has maintained for almost a year that it only learned of allegations of a relationship between Jones and Freeman in March 2021. The firm has said Freeman lied to it about the full extent of her relationship with Jones, acted responsibly, and didn’t violate any ethical rules or disclosure obligations.

Charboneau didn’t name the Jackson Walker attorneys he said knew of the relationship, or detail when they became aware of the relationship. But the texts viewed by Bloomberg Law indicate that they included bankruptcy attorneys Matthew Cavenaugh and Veronica Polnick.

Jim Wilkinson, a Jackson Walker spokesman, in a statement acknowledged that it recently produced text messages via the discovery process “which could suggest that one or more attorneys may have been aware of an ongoing intimate relationship between former Judge Jones and Elizabeth Freeman.”

After discovering the text messages, the firm immediately produced them, he said. The firm has acted responsibly throughout the the legal proceeding and investigation, and will continue to do so, he said.

Polnick and Cavenaugh didn’t immediately respond to requests for comment.

‘We Want To Protect Her’

An anonymous letter alleging a relationship between Jones and Freeman was sent to Jackson Walker on March 6, 2021 by pro se litigant Michael Van Deelen. Van Deelen attached the letter to an existing motion he made to recuse Jones from a bankruptcy case in which Jackson Walker represented a debtor.

Cavenaugh soon after asked a judge to seal the letter.

Jones’ fellow Houston judge and mentor, Marvin Isgur, ultimately allowed the letter to remain sealed at a March 10, 2021 hearing. At that court hearing, no one from Jackson Walker confirmed that they were aware Freeman had, at the least, been in a prior relationship with Jones.

Behind the scenes, Cavenaugh and Polnick exchanged a series of texts about the matter, according to records seen by Bloomberg Law.

Polnick on March 7, 2021 told Cavenaugh that the situation “is literally freeman’s worst nightmare,” and that “she’s the most private person I know.”

Cavenaugh responded to Polnick that he felt terrible but “if we want to protect her, this is the route.” The texts viewed by Bloomberg Law didn’t elaborate on “the route.”

Polnick then asked Cavenaugh: “You think we get out of this with 1) freeman still at JW, 2) Jones still on the bench and panel, and 3) still working with KE?”

“JW” refers to Jackson Walker, the “panel” means the complex panel in which all large Chapter 11s were funneled to either Jones or Isgur, and “KE” refers to Kirkland & Ellis LLP, the firm that Jackson Walker regularly partnered with in the Houston bankruptcy court.

Cavenaugh responded: “All 3.”

Jackson Walker is represented by Rusty Hardin & Associates LLP and Norton Rose Fulbright US LLP.

The case is The case is Professional Fee Matters Concerning the Jackson Walker Law Firm, Bankr. S.D. Tex., No. 23-00645, hearing 10/8/24.