From Van Deelen v. Jones, decided Friday by Chief Judge Alia Moses (S.D. Tex.) (for more on the underlying scandal, see here):
The Amended Complaint alleges a sprawling tapestry of ethical lapses by major players in the nation's bankruptcy system. The Defendants insist that these accusations, however salacious, create no viable cause of action for the Plaintiff to pursue. Upon reviewing the applicable law and the Plaintiff's allegations, the Court agrees and dismisses the Plaintiff's claims—though it does so with some consternation….
The Plaintiff alleges that the Defendants—a former Chief United States Bankruptcy Judge, his romantic partner, and two firms with nationally renowned bankruptcy practices—rigged the nation's busiest bankruptcy court for profit and prestige. This scheme propelled the Defendants to national prominence and yielded tens of millions of dollars in attorneys' fees, all drawn from bankruptcy estates at the expense of creditors. The Defendants advanced this scheme, the Plaintiff claims, through a pattern of deception that included the concealment of a romantic relationship between then-Chief Judge David R. Jones ("Jones") and Elizabeth Freeman ("Freeman"), a partner at Jackson Walker, LLP ("Jackson Walker") and Jones's former law clerk.
This relationship, while unknown to the public, was an open secret among the close inner circle of lawyers whom Jones appointed to dozens of the most lucrative bankruptcy cases in the country. According to the Plaintiff, the Defendants' scheme diminished the financial recovery of parties, like him, with a pecuniary interest in the cases Jones oversaw. The Plaintiff ultimately seeks relief from what he calls "perhaps the most significant bankruptcy scandal in U.S. history." …
