Dive Brief:
- U.S. bankruptcy Judge David Jones, who had overseen Mountain Express Oil’s bankruptcy case this year, abruptly resigned from the U.S. Bankruptcy Court for the Southern District of Texas last week, a spokesperson for Chief U.S. District Judge Randy Crane confirmed via phone.
- Jones’ resignation stems from a lawsuit filed in early October accusing the judge of having an undisclosed romantic relationship with an attorney whose firm had cases in his court. According to an Oct. 13 memo from the 5th U.S. Circuit Court of Appeals, Jones did not disclose this relationship to the parties or counsel in those court cases, nor did he recuse himself.
- As it pertains to Mountain Express, an Oct. 20 court filing shows that all of Jones’ cases have been shifted to Chief District Judge Alia Moses of the Western District of Texas.
Dive Insight:
According to the Oct. 13 memo, Jones was in a years-long relationship and had shared a home with attorney Elizabeth Freeman, who previously worked for the firm Jackson Walker LLP. Members of that law firm “regularly appeared before Judge Jones since 2017.”
As noted in the lawsuit filed on Oct. 4, a former shareholder in energy company McDermott International accused Jones, Jackson Walker and Freeman of running a scheme in which bankruptcy filers would hire Jackson Walker to represent them and get “favorable treatment” from Jones because of his relationship with Freeman.
This accusation dated back to March 2021. At that time, Jones denied that he had a relationship with Freeman, according to the lawsuit.
The spokesperson for Judge Crane’s office declined to offer further details into Jones’ resignation. Jones had been the most active bankruptcy judge in the U.S. since January 2016, “overseeing 11% of all Chapter 11 bankruptcies involving more than $100 million in liabilities,” according to a Reuters report, which cited data from Debtwire.
Jones had been the judge overseeing Mountain Express’ tumultuous bankruptcy case since the convenience retailer and oil company filed for Chapter 11 in March. In August, it was Jones’ decision that converted the case to Chapter 7 — thus commencing the liquidation of Mountain Express’ assets — after the retailer’s proposed sale to Arko failed.
